Stockwatch: AstraZeneca's Groundhog Day
This article was originally published in Scrip
The Groundhog Day ritual which took place in Philadelphia last week predicted another six weeks of winter. Had Punxsutawney Phil surveyed the public markets for life sciences on his way out of his burrow, he would have seen even more signs of a potential prolonged freeze ahead for some companies.
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Early in 2020, company guidance was that pandemic-related effects would have dissipated in the third quarter. Issues specific to J&J and Roche leave this broad conclusion still up in the air.
Drugs that have failed in clinical studies often come back for another go, making the same mistakes for a new cohort of investors who missed the first failure. The global pandemic is also enabling this for once- or twice-failed drugs.
Batsu is the Japanese term for games that have penalties, unlike those which are just for fun. Seasoned investors are well aware of the risks of drug and vaccine development but many investors new to the sector are just learning of the downsides.