Investors can certainly make money these days investing and trading Biotech stocks. However, trading stocks is not for the faint hearted and it is an exercise in optimism especially when the promise of success is a long shot or goes up in flames shortly after you’ve invested. One would say that the recent boom in Biotech stocks is because of lucrative new drugs, encouraging research, the Food and Drug Administration’s “breakthrough” designation and their improved communication with Biotech and Pharmaceutical companies. Biotech stocks typically trades high but the question is, are they trading higher than normal because they are overvalued? Thus, the reason why the value of Biotech stocks are falling precipitously and then for no obvious reason shooting up. http://tinyurl.com/p2jwth6.
There is a misconception that the Food and Drug Administration is friendlier. It is true they have improved their communications with companies but the FDA still has the final word and can be tough and conservative; look what happened to AVEO Pharmaceutical and Intercept Pharmaceutical. With every boom there is a down fall. Mark Schoenebaum, a top Biotech and Pharmaceutical analyst said this about the rise and fall. http://tinyurl.com/ncfu2np also, see what Geoffrey Porges analyst of Bernstein research said http://tinyurl.com/nlaxpb8
The Big Buyout buzz recently reported is the potential matchup between Pfizer and AstraZeneca; we know how that story ended. However, even though AstraZeneca had rebuffed Pfizer’s offer, that dance is not over yet. Here’s what’s in the news http://tinyurl.com/kakw745. Remember the megamergers of Pfizer and Wyeth, Merck and Schering-Plough, Roche and Genentech, to name a few and of course, I named the most public buyouts. Mega mergers-Buyouts change the industry landscape and some would argue that they “fail to produce the kind of major stockholder value that’s promised by management”. Others would argue that buyouts disrupts Research & Development, stifles innovation and is sure to bring job losses as companies cut redundancy. The positives of these megamergers is that there are opportunities for combination therapies, there is opportunity to potentially increase ones a pipeline and thus, new revenue, cost cutting opportunities and innovative growth prospects. Is there a new blueprint for the Biotech regarding mergers? This was in Forbes magazine a few months ago. http://tinyurl.com/mxm9e2t. The Motley Fool is a good source for me with regard to identifying Biotech stocks to consider investing in. The Motley Fool list the top stocks to watch http://tinyurl.com/n6bzohv