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Stock Watch: Wrap Up For The Biotech Winter

A Recovery In Biotech Stocks Has Many False Dawns

 
• By Andy Smith

A drastic risk-off pullback in the public market can close an IPO window while private biotechs aspiring for either a public debut or an acquisition by big pharma may be stymied by their stale valuations.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

In the year to date the NASDAQ Biotech Index (NBI) has fallen by nearly 14% compared to the less risky NYSE Arca Pharmaceutical Index’s (DRG’s) fall by nearly 7%. But early August brought a wave of optimism to the biotech sector with social media commentators lauding the NBI’s rise by 22% from its mid-June lows. Meanwhile, despite reasonable second-quarter earnings the DRG could barely manage a recovery into positive territory from the same time point.

With a summer of market-depressing news on inflation and the war in Ukraine, both indexes have retrenched but the NBI...

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