Why You May Need to Invest in Biotech Stocks This Time
With the coronavirus pandemic casting uncertainty on markets, investors believe biotech stocks could be the way forward.
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In crisis situations, it can be hard to find the right industry to focus on. With direct access trading offered by online broker dealers, you can get started easily. But you still need to find the right industry to focus on. Biotech Stocks the Natural Choice It is natural that the coronavirus situation throws light on biotech companies that have the capability to develop drugs to counter the pandemic and even prevent it. It is no wonder then, that such biotech companies have experienced stocks soaring recently. Generally, biotech stocks haven’t been doing too well, though they have been doing better than the market generally ever since the pandemic spread to Europe and North America from China. For example, while the S&P 500 declined by 26.7% thus far, the iShares Nasdaq Biotechnology Index ETF declined by just 15.6%. All eyes are therefore focused on biotechs. It is a race that is going on for developing the COVID-19 vaccine. Gilead Sciences ($GILD) is at the forefront. It manufactures the Remdesivir experimental medication for Washington patients. Biotech Stocks at the Head of the Covid-19 Vaccine Race Regeneron Pharmaceuticals ($REGN) is also developing a treatment by collaborating with the Department of Health & Human Services. Moderna ($MRNA) has an investigational vaccine for which the National Institutes of Health is carrying out a clinical trial. You would need to focus on this industry and invest in it. There could be some takeover in the future. Smaller companies developing these drugs could be valuable for larger companies who may be interested in taking them over. The FDA approved 48 new drugs last year, which was way higher than its 10-year average that was around 38. Since 2010, we’ve seen approvals rocketing. The trend is likely to continue this decade, reckons analyst Adria Cimino. For successful investing in the industry, you need to check every biotech company individually, case by case. While it is unclear if biotech stocks would be able to sustain their gains after the coronavirus outbreak ends, with the FDA approving more and more drugs, biotech stocks offer a lot of opportunities.
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