The biotech sector goes through boom and bust. I describe the period in the aftermath of a biotech bubble as a ‘wilderness period’, during which stock prices stagnate, few generalist investors are attracted to the sector and funding remains difficult. Despite this, there are areas within drug development that usually offer investors a more defensive and less volatile exposure to the sector. (Also see "Stock Watch: Brace For European Biotech Departures From NASDAQ" - Scrip, 22 March, 2022.)
Stock Watch: Trouble In The Pharmaceutical Value Chain
Fundamental Trends Loom Over The Sector’s Picks And Shovels
The biotechnology and pharmaceutical sectors outsource much of their drug discovery and clinical development efforts to contract organizations. Investors’ reduced appetite for biotech is now impacting those contractors.
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