STOCKWATCH: Echoes from the last biotech bubble
This article was originally published in Scrip
Broad stock markets seem to be schizophrenic; flitting between the worry of a tapering of quantitative easing in the US, a credit crunch in China, and then just ignoring all those issues. The US biotechnology sector mirrors this duality but for different reasons with the NASDAQ Biotech index (NBI) being off almost 7% from its mid-May peak, but IPOs and secondary offerings still flood the market.
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While the stock prices of a few biotech companies have advanced significantly as a result of their pandemic efforts, a broad biotech stock index has underperformed the pharmaceutical index. Why?
AstraZeneca’s controversial switch to for-profit COVID-19 vaccine pricing and the costs of the Alexion acquisition clouded its strength in oncology. Meanwhile, Clovis's tight grip on its marketing purse strings may have hit revenue recovery.
Pfizer’s pandemic-related windfalls might be prompting some investors and analysts to try steering the resulting largesse towards their own favored acquisition candidates.