Biotech just round-tripped for 2019
Yesterday, in the latter hours of the afternoon, the closely watched XBI biotech index slipped right back to where it started the year, erasing the gains of a booming spring and some short-lived summer optimism.
And if you’re looking for some seasonal encouragement, you won’t get it from the analysts at Cowen. The firm’s regular survey of institutional investors began with the ominous observation that “it is getting colder and darker” before pointing out that, for the third month in a row, biotech stocks substantially underperformed the broader market.
Some of the issues are old — Big Biotechs are struggling to grow, smaller ones look overvalued — but at least one investor complaint is fairly novel: The emergence of Sen. Elizabeth Warren as a likely Democratic nominee for president suggests the political pressure around the cost of medicine might only escalate, which would further alienate generalists from the drug industry.
And if you’re looking for some seasonal encouragement, you won’t get it from the analysts at Cowen. The firm’s regular survey of institutional investors began with the ominous observation that “it is getting colder and darker” before pointing out that, for the third month in a row, biotech stocks substantially underperformed the broader market.
Some of the issues are old — Big Biotechs are struggling to grow, smaller ones look overvalued — but at least one investor complaint is fairly novel: The emergence of Sen. Elizabeth Warren as a likely Democratic nominee for president suggests the political pressure around the cost of medicine might only escalate, which would further alienate generalists from the drug industry.
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