Biotech Industry Watch for Investors
Like many market segments in recent weeks and months biotech industries have experienced a high level of volatility since mid-year 2015. Though the trend has been a down market with results of a drop nearing the 25% range since July and a decline in the NASDAQ biotech index of 10% since the start of the New Year, analysts remain convinced of the viability of the industry for the long term.
Investor concerns are fueled by China’s lagging economy and the potential impact it could have on global markets. Changes in regulatory policies that impact the cost of both research and production generate additional hesitation for potential investors.
What is the Biotech Industry Outlook for 2016?
Investors would do well to recall that biotech industries overall have provided consistent returns in the prior four Januarys amounting to an average 7% gain. Some biotech fund analysts see this period of selloffs as an opportunity to add high-quality investments to their portfolios at bargain rates, and individual investors can benefit from the same investment logic.
Although price regulations may impact profits on long-standing products it’s the newest drugs and advances in research and development that will result in longevity and investor gains. Those companies with high commitment to innovation and patient well-being are the ones analysts point to for profitability in the long term.
In the US, the FDA has begun programs to expedite evaluation and approval of new drugs for diseases where treatment options are currently limited or nonexistent. With the breadth of diseases that still remain largely untreated today there is inherent opportunity for growth in research and new products that opens the door to future profits.
Biotech industries remain an opportunity for turn-around in 2016 for innovative companies committed to development and new treatments. Granted there have been negatives in performance in recent months. One highly-publicized event was the move by CEO Martin Shkreli to initiate a price jump of a widely-used medication from $13.50 to $750 per pill making him the today’s most hated pharmaceutical executive overnight. That move turned some industry proponents into sceptics of ethical behavior in the market.
Biotech industries remain a competitive segment of the market that can be an effective part of an investment portfolio. The New Year holds promise for buying at attractive low rates that carry the anticipation of long-term growth.
Making the Right Moves in Biotech Industry Investments
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