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.)
Contract development and manufacturing organizations (CDMOs) and clinical research organizations (CROs) work on a for-hire basis on behalf of biotech and pharma companies to offer either screening services for drug discovery, manufacturing sites for active pharmaceutical ingredient (API) supply, or clinical trial conduct and networks, respectively. Public stocks in these companies can offer investors a derivative on drug development and commercialization without the stock price volatility associated with failed clinical trials or commercialization challenges