Strong Comeback for Biotech Industry

By: John Jordan, CIS Senior Compliance Associate
johnjordan@cis-partners.com

As we have all witnessed, the stock market can be a very volatile entity. We have seen numerous sectors fall in great lengths in something that has not been seen in many people’s lifetimes. One of the industries that has taken a hit is the nation’s biotechnology field. However, Biotechnology Industry Organization (BIO) and Thomson Reuters have predicted that this industry will rebound this year (3). BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. The Corporate Services business of Thomson Reuters provides a suite of solutions across the Investor Relations, Corporate Communications, and Business Intelligence functions (1).

John Craighead, Managing Director of Investor Relations and Business Development at BIO, has stated that investors had predicted by mid-year a 15% increase in the market for the biotech field. That prediction has fallen quite short to the gains it has obtained (1). In doing some research, it looks like the large comeback for the industry is partly due to the strong positive clinical trial data. Other aspects such as acquisitions, mergers, and improvements in the market sentiment have also helped in the gains by the sector (1). One aspect that is making the public cautious, though, on biotech’s gains, is that investors predicted that the overall research and developmental productivity for 2009-2011 would be much the same as the years 2006-2008.

With everything taken into account, investors remain bullish about the industry. Two-thirds of the studied participants expect biotech to outperform healthcare and 70% expect biotech to outperform the rest of the market this year (2). With this information one can say that this is quite the bounce back.

Sources:
1. http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20090812005799&newsLang=en
2. http://www.fiercebiotech.com/press-releases/biotechnology-industry-expected-rebound-according-bio-thomson-reuters-investor-percep
3. http://www.fiercebiotech.com/story/biotech-industry-shows-signs-strong-comeback/2009-08-13?utm_medium=nl&utm_source=internal