Stockwatch: No Second Chances For Underperforming Drug Launches
Earnings Season, Coronavirus And Debt Expose Fragile Investment Propositions
As the first-quarter 2020 earnings season transitions from big pharma to the long tail of smaller biotech companies, the coronavirus pandemic-related dynamics of channel stocking and greatly diminished numbers of clinic visits have magnified effects at companies with single underperforming drugs.
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The pharma saw a $250m revenue increase due to inventory stockpiling and early prescription renewals, but its therapies outside cancer and diabetes may suffer in the coming quarters due to COVID-19.
As generalist investors continue to push higher the stock prices of biotech companies that announce the most tenuous of coronavirus developments, the track record of biotech companies developing even vaccines for which the antigen is proven to be safe and efficacious remains poor.