Even if the biotech boom has been fueled in part by fundamentals, the author points out 3 things which placates the misplaced optimism he has heard from investors and executives, or seen in the polls of buy siders run by ISI Group’s Mark Schoenebaum:
1. We have not reversed the decline in R&D productivity. We probably haven’t even slowed it.
2. The FDA is not fundamentally friendlier to companies than it was in the past.
3. Pricing Power May Not Last Forever.
Article on http://ow.ly/v4Cqy:
Biotech Stocks: Seeing Rainbows, Missing The Rain
The Nasdaq iShares Biotechnology Index, by YCharts This week’s 10% drop in the Nasdaq iShares’ Biotechnology Index — not to mention the fact that biotech stocks, after a torrid two years, are up less than 4% year-to-date — has investors worrying that the sector’s two-year boom is over. We’re living through major […]