(Thanks to jbog on Dew's I-hub board for this.)
Adam Feuerstein
Biotech
11/21/2008 12:37 PM EST
Biotechs are having a very rough day. I should be accustomed to this by now, but today feels much worse. We're down even though the broader markets teeter-totter around.
Among the things I' m hearing from depressed healthcare investors today:
Obama, Daschle, Waxman and coming healthcare reform: For biotech and drug stocks, the big worry is the introduction here of a European style drug approval/pricing model.
Citigroup: Could be, or could have been, part of the syndicate willing to loan money to Roche so it can buy the rest of Genentech. As C falters, so too, might the Roche-DNA deal.
Small cap biotechs: Who cares? Dead, dead, dead.
FDA: Run away!
Lastly, and perhaps most depressing: The sound of panic I used to hear in the voices of healthcare fund managers is no longer there. The panic was frightening, but at least it showed a willingness to fight. Today, the mood is one of resignation and surrender. I don’t know how else to describe it.
Bladerunner
P.S. I don't necessarily agree with Feuerstein on the Obama/Waxman/Daschle (and add Baucus/Kennedy) healthcare reforms. Putting 40-50 million new people into the "normal" healthcare system, might be a boon to the pharmaceutical industry, especially those specializing in CNS diseases. Imagine how many of these new folks are going to be treated for things like ADHD, depression, bi-polar disorder, and schizophrenia, not to mention HIV, HBV, HCV etc. Even with Medicare pricing, the quantities of prescribed drugs could dramatically escalate and provide a significant growth in profits for pharmaceuticals. I don't know enough to say that this is going to happen, but I think the doomsday scenarios for pharmaceuticals based on an Obama Presidency are largely overblown. It all has the ring of Sean Hannity's "Obama recession."
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