Biotech Industry Poised For 2017 Growth?

While 2017 has just begun, it appears that after underperforming the overall market by a significant amount over the past year and a half, the environment looks much better for the biotech sector in the coming year.

Merger and acquisitions activity is picking up and we have already had 3 over $5 billion purchases across the industry so far this year. All acquisitions included nice buyout premiums culminating with Johnson & Johnson’s purchase of Europe’s largest biotech concern Actelion for a cool $30 billion to close out January.

President Trump pledged to streamline the FDA and speed up the drug approval process Tuesday. This triggered the best one day gain in the sector since the area’s post-election surge as this could significantly lower development costs and get products on the market sooner. The industry could also be the beneficiary of tax reform which also is on the new administration’s agenda.

After enduring a year and a half of underperformance, biotech investors look like they have sunnier skies to look forward to in 2017. Will biotech turn out to be one of the high growth sectors of 2017? Things could turn out that way.