The public market for biotech stocks is notoriously volatile. Retail and generalist investors may become confused or react irrationally when a small biotech company releases “positive” or “encouraging” data from tests conducted on a handful of rodents using an unvalidated disease model for its experimental drug. This issue has worsened with the advent of trading algorithms that might be programmed to disregard preclinical announcements but could still buy the stock of a company announcing a “positive” clinical trial, with the only positive element being that the active arm shows the same safety (with efficacy mentioned much further down in the announcement) as placebo.
Stock Watch: Do Regeneron And BridgeBio Stock Movements Signal Smarter Investors?
Volatility Has Been Lower Than Usual Following Recent Announcements
Historically, announcements from biotech companies have triggered stock price fluctuations as investors misinterpret the details. However, two recent instances suggest this pattern might be shifting.
More from Stock Watch
• By
Supply chain disruption fears at the start of the COVID-19 pandemic caused drug over-ordering. Imminent tariffs on drugs may have had a similar effect on pharma sales in Q1 earnings season.
• By
The promise of innovative therapies seems to have been constrained not by efficacy or safety concerns, but because the high price of treatments is incongruous with the reimbursement of short-course therapies.
• By
After lowering its full-year earnings guidance just six weeks before the end of 2024, Bayer, by talking up of the prospects for its new drug launches and a major clinical trial result in 2025, might risk damaging its integrity further.
• By
CSL’s US influenza vaccine sales were a window into wider issues for vaccine manufacturers that had already impacted the fourth-quarter results of Merck, Pfizer and GSK. There could also be a correlation between lower vaccine sales and the measles outbreak in Texas.
More from Business
• By
CEO Kris Elverum told Scrip about the start-up’s platform for editing RNA to correct genetic variants that cause harm and to reproduce healthy variants as a means of treating disease.
• By
Pharma executives and investors are waiting with bated breath to find out if President Trump will include drugs in a new round of tariffs to be announced on 2 April.
• By
After failing a Phase II monotherapy study in early Parkinson’s, Cerevance will focus on adjunctive therapy without abandoning the monotherapy concept.