I first bought Crinetics Pharmaceuticals (CRNX) in June this year at an average cost of $31.86. From the start, it was one of my highest-conviction Moonshot ideas — a company whose pipeline looked both innovative and undervalued.
As the FDA decision date approached, my conviction only grew. A week before approval, I added another 20% to my position at $33.40, making CRNX nearly 38% of my Moonshot Portfolio. It was a bold move, but one that reflected my belief that this catalyst could reshape the company’s trajectory.
Then came the moment: yesterday after market close, CRNX announced FDA approval. The stock was halted briefly, and when trading resumed pre-market, it jumped 8%–14%. By the open, momentum carried it to +20%, and intraday it peaked near +29%, trading above $46.
That surge validated my thesis — but it also tested my discipline. Instead of getting caught up in euphoria, I executed my staged selling plan. Two limit orders at $43.88 and $46 hit during the rally, trimming 22% of my position and locking in gains of 40%–45%.
The proceeds didn’t sit idle. I rotated part into Costco (COST), a long-term compounder I’d been waiting to buy at a lower entry point.
This sequence — building conviction, sizing up before the catalyst, and then locking in gains after success — shows how I approach Moonshot investing: bold enough to lean in, disciplined enough to scale back, and patient enough to redeploy into stability.
1. Estimating Revenue and Profit
After FDA approval, it’s standard to estimate annual revenue and profit:
- Target patient population: 10,000–20,000
- Annual treatment cost per patient: $15,000–$25,000
- Potential annual revenue: around $500 million within 2 years
Though the patient base is relatively small, revenue is significant compared to CRNX’s current scale.
For profit:
- Subtract operating and R&D costs (≈ $350 million/year)
- Adjust for drug warnings or limitations that could reduce revenue
- Example: $500 million revenue might translate to $150 million net profit depending on efficiency
Stock price implications:
- Market cap ≈ $3.5 billion
- Estimated profit ≈ $150 million
- Resulting P/E ≈ 23
- If re-rated to P/E 27–30, upside potential ≈ 15%–20%
- Target market cap ≈ $4.25 billion → potential gain ~21%
This framework sets realistic expectations and helps avoid hype-driven trading.
2. Staged Selling and Execution
My key rules:
- Sell about one-third after 40–50% gains to lock profits
- Sell another one-third between 80–100% gains
- Let any remaining shares run with trailing stops
- Trim 5–10% after sudden 20%+ daily spikes
How it applied to CRNX:
- Premarket: +8%–14%
- Market open: surged +20% to above $43
- Peak intraday: near +29%
My execution:
- Sold ~11% at $43.88 (≈ 40% gain)
- Sold ~11% at $46.00 (≈ 45% gain)
- Used proceeds to buy Costco, diversifying at an attractive entry
CRNX Staged Selling Summary
| Stage | Action Taken | % of Position | Sale Price | Outcome |
|---|---|---|---|---|
| First Sale | Locked in early profits | ~11% | $43.88 | Secured ~40% gain |
| Second Sale | Trimmed for momentum | ~11% | $46.00 | Captured ~45% gain |
Why I Sold
- Portfolio discipline: CRNX capped at ~30% max weight
- Risk management: FDA approval removed binary risk; gains locked in
- Reallocation: partial profits now working in Costco, balancing growth and stability
This was not a lack of confidence in CRNX. Rather, it was about managing exposure, securing gains, and keeping the Moonshot Portfolio balanced.
Key Lessons
- Conviction matters. Sizing up before catalysts is how outsized gains happen — but conviction must be based on research, not gambling.
- Plan ahead. Trading halts and post-approval spikes happen fast. Having sell targets in advance prevents emotional decisions.
- Staged selling works. It takes the pressure off “guessing the top.” You capture upside while still holding a meaningful position.
- Discipline > prediction. As Bogle said, “The enemy of a good plan is the dream of a perfect plan.” Today was about executing a good plan, not chasing perfection.
CRNX Position After Trades
- Still holding ~78% of original shares
- Gains realized and redeployed
- Exposure capped at portfolio limits
The Moonshot Portfolio remains real, not hypothetical — and every trade reinforces the core principle: profit-taking with discipline beats prediction with emotion. See the full Moonshot Portfolio update here .
Disclaimer: This blog is for educational purposes only and does not constitute investment advice. It is not a recommendation to buy or sell any security. Readers should conduct their own research or consult a financial advisor before making investment decisions.