Many biotech stocks struggled in 2023 despite a robust year for U.S. drug approvals. As these new therapies begin treating patients, some investors see better times ahead next year. “We’ve seen a lot of innovation,” Dan Lyons, portfolio manager on the health-care team at Janus Henderson, said, explaining that he is bullish on 2024 because it will be a period when new markets are being created. “That can be a great opportunity, assuming you invest behind the companies that have the right alignment of physicians, patients and payers to build a large market with an innovative new drug,” he said. This year began with a Food and Drug Administration approval for Leqembi, an Alzheimer’s disease treatment, and was capped off in December by approvals that included two separate gene therapies for sickle cell disease — a first in the field. Among the other innovations were treatments for cancer, some rare conditions and another entry into a new class of anti-obesity medications, which have grabbed headlines all year. “Unless you had an obesity program tucked away in your pipeline, chances are 2023 was a tough year with rising interest rates and intense competition,” Canaccord Genuity analyst John Newman said in a research note. “We expect this environment to continue but look forward to the prospect of lower interest rates in 2024.” The Federal Reserve has penciled in three rate cuts for next year. When that happens, Canaccord Genuity said to expect a “strong rally across the biotech sector rewarding innovative, but riskier assets.” Until then, investors will be more focused on proven clinical and commercial success stories, it said. M & A is picking up Still, deal-making is already starting to fuel excitement. Janus’ Lyons said he has been encouraged by the pickup in acquisitions in the sector, which he expects will aid its recovery. “I think that’s going to continue or accelerate into next year, just as large-cap pharmaceutical companies have a real hole in their…
2023-12-28 10:02:00
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