- Biopharmaceutical stocks have undergone a dramatic correction over the past six months, with the XBI declining by 45%.
- The decline was appropriate, given the number of companies that went public in 2021 with preclinical data and a valuation exceeding $1 billion.
- Not only would these companies not be on the market before 2027, but the cash burn suggested that additional financing would be needed.
- With stocks across all of healthcare, with the exception of large-cap pharmaceuticals, dramatically lower, there are stocks attractively priced.
- Additionally, with the stock declines, analysts are lowering price targets (which had been too high), creating, in my opinion, additional selling pressure. The short interest is high in many stocks.
For further details see:
The Correction In Biopharmaceutical Stocks Is Likely Over