Biotech Stocks Are A Dumpster Fire. An Analyst Explains What's Going On

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In the midst of a pandemic that proved that the biotech industry has the power to help save the world, one can be excused for not realizing the industry is actually having kind of a rough time on Wall Street. The value of a widely followed biotech stock index fund, the IBB, is down 23% over the last year. But that doesn’t even tell the whole story because it’s dominated by bigger companies like Moderna, whose stock is benefiting, of course, mightily from its Covid vaccine.

Another index fund, the XBI, which tracks smaller and mid-sized biotech companies, has lost almost 43% in the past year. So what’s ailing biotech? To help us sort it all out, we spoke with Jared Holz, the health care equity strategist with Oppenheimer, on a recent episode of STAT’s biotech podcast, “The Readout Loud.”A lightly edited transcript of the conversation is below.What are you hearing from investors and from people in the industry about what they’re experiencing right now with this sort of sector-wide downturn? 

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Well, this seems like the most dour the health care buy side has been in my experience, which is almost a decade in this sort of role. The downdraft since February of 2021 — so almost a year now — has been the most significant in any period of time where investors have been tracking biotech. There’s a combination of despair and also confusion as to why the indexes are performing so poorly. 

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About the Authors Reprints

Adam Feuerstein

Senior Writer, Biotech

Adam Feuerstein is a senior writer and biotech columnist, reporting on the crossroads of drug development, business, Wall Street, and biotechnology. He is also a co-host of the weekly biotech podcast The Readout Loud and author of the newsletter Adam's Biotech Scorecard. You can reach Adam on Signal at stataf.54.

[email protected] @adamfeuerstein

Damian Garde

Reporter at Large

Damian Garde is a reporter at large, live and feature journalism, covering the global drug industry and contributing to STAT’s industry-leading events.

[email protected] @damiangarde

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