Investor euphoria for biotechnology companies is reaching levels not seen since the dotcom boom, as one of Wall Street’s riskiest equity bets finds itself back in fashion.
The boom in demand for fledgling drug developers searching for cures to the world’s most daunting illnesses comes as the Nasdaq Biotechnology index has risen 43 per cent this year, outpacing the 18.6 per cent gains on the S&P 500 and all major industry groups on the US benchmark, including healthcare stocks.
The rally come as fresh optimism has poured into the sector in recent months, lifting valuations for established pharmaceutical companies and bolstering confidence in mergers and acquisitions, including Perrigo’s $8.6bn bid for Ireland-based Elan this week and Amgen’s $10bn unsolicited takeover proposal for Onyx Pharmaceuticals last month.