Barron's has a biotech focused article from March 2nd:
Following a WSJ article in February that highlights the big pharma companies on the lookout for deals, Lewis Braham in this article argues that perhaps the beat-down that biotech has undergone the past two years has left the space ripe with opportunities for active managers (below through 2/28/2023):
The intro:
Consider that the potential for most biotech companies isn’t what their current earnings or valuations are. It’s whether they will have positive test results for a potential blockbuster drug, and then whether the Food and Drug Administration will approve the drug for sale. That isn’t easily discernible by quantitative screens seeking companies with cheap valuations, or by the average Wall Street analyst trained to read income statements and balance sheets.
The key to it all? "Finding the right stocks". That includes this comment from our friend Mark Charest: "...knowing which kinds of biotech companies large drug companies want to acquire."
The space has been beat up and the FDA has proven to be somewhat "friendly" to the sector on the innovation and approval side. Perhaps there is a way to navigate this complicated space without just closing your eyes and holding on tight with all of the volatility at play.
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