Pharmaceutical Companies
What’s happened: Drugmakers have fallen less than the broader market as investors took shelter in their strong balance sheets and notably high dividends.
Street says: Analysts have been on the lookout for potential drug shortages amid export restrictions in China and India. Many companies have broadly shrugged off these concerns, and JPMorgan analysts wrote on Monday that demand for prescription medications is “fairly inelastic.”
Biotechnology
What’s happened: Biotechnology has been among the most volatile groups as companies pursuing vaccines or drugs to combat the virus have surged while markets tumbled, including Inovio Pharmaceuticals Inc, Novavax Inc., Regeneron Pharmaceuticals Inc. and Gilead Sciences Inc. Small-cap companies like Trillium Therapeutics Inc. have also gotten a lift from Gilead’s deal to buy Forty Seven Inc. last week.
Street says: Results from Gilead’s coronavirus drug candidate are expected in April, which should provide a catalyst for other companies hunting treatments. Jefferies’s Holz advised investors to look at small-caps studying drugs instead of Gilead, which has “been overly rewarded.” “Supply concerns, though quieter for now, certainly remain,” Baird analysts wrote on Friday. Amgen Inc., Biogen Inc. and Regeneron all have drugs that could get pressured from impacts to the supply chain. Drug sales could also be hurt if patients forgo medicine refills to save money or avoid pharmacy trips.
This article was provided by Bloomberg News.