Established ones usually do well. Ones that need money often go out of business or sell for pennies on the dollar because credit becomes too expensive if not impossible, and recessions are a terrible time do to an offering.
Insurance companies are also less likely to approve experimental drugs when economic times are tight and people stop paying their premiums, are laid off and lose work insurance, etc.
However, you are correct that if a start-up biotech has a breakthrough product that gets FDA approval, the stock will find its intrinsic value regardless of how the overall economy is performing.
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