Stock Watch: Too Early To Call The End Of Biotech Wilderness

In one of David Poyer’s novels on the career of a fictional US naval officer, a regional war erupts and politicians consult with academics on how such conflicts are resolved. While also relevant today with wars in Europe and the Middle East, I wondered if there were correlates like attrition, successes and failures with the end of what I have termed the biotech wilderness period. (Also see "Stock Watch: Exploring Biotech’s Route Through Bubble And Wilderness" - Scrip, 26 September, 2023.) The omens for a definitive answer are not good. Academic forecasters have toiled for many years without success on historical stock and index data to create algorithms that attempt to predict when wilderness and bubble periods start and end. This failure is partly because stock markets are complex systems where investors make irrational individual decisions, while at the same time, different momentum investments are made just because many others have done the same thing.

However, merger and acquisition (M&A) activity has always driven the biotech sector and the momentum and impetus have been building...