Biotechnology , The Good , The Bad , and The Investment​

 A good investment can be one way to secure your financial future. With the global economy is still slowly recovering from covid-19 it’s more crucial than ever to focus on long-term investing nowadays while sticking to your game plan.

Right now, we’re living in the golden age of technology, and some scientists believe it’s also the dawning age of biotechnology. Technology combined with everything science has given birth to many scientific advancements and opened so many new doors of knowledge that their predecessors only can imagine. And not just stop in that sector, biotechnology is also presenting exciting opportunities for investors. Many of the best biotech companies have both strong drug candidate pipelines and winning drugs already on the market.

Biotechnology as Investment

Biotechnology stocks have the potential to provide investors with incredible returns. Biotech stocks have the potential for significant investment gains if a product is deemed effective and safe.

The business of curing diseases it’s like a gold mine, and investors will jump on the entourage for any stock that shows the promise of a big breakthrough and lucrative outcome.

As reported on Investopedia by Casey Murphy, Novavax Inc. (NVAX) is a biotech company that produces vaccines. In early 2020, when the Covid-19 pandemic began, biotech companies like Novavax joined the push to produce a coronavirus vaccine. The company secured nearly $1.6 billion in funding from the U.S. government.

This stock surge was driven by the emergence of the SARS-COV-2 infection. Companies are developing new solutions for combating the pandemic situation.

This rapid growth cannot be separated from the government’s contribution. Because, after all, it is the government that makes regulations on drugs, food, and supplements. Taken example from PR News Wire, in September 2020, the Government of India supported research institutes in agriculture biotechnology, including organic farming. Since the last 3 years, around USD 42.67 million had been invested to support this endeavor. According to PR News Wire, Biotechnology Market Size estimates Worth $2.44 Trillion By 2028.

But like any other things that exist in this world have two sides, so does biotechnology stock. Just like the old words of wisdom says “what can go up it also can go down” to make significant gains comes the potential for devastating losses. With some unpredictable outcomes of Biotech products, clinical trials also facing food and drugs regulation could be the deciding factors in determining the fate of a company’s stock.

Case Example

For an example of these cases, as is shown on Investopedia by Casey Murphy For example, on July 15, 2021, the FDA Cardiovascular and Renal Drugs Advisory Committee (CRDAC) voted to recommend not approving FibroGen’s roxadustat. The medicine was designed for the treatment of anemia (insufficient red blood cells) due to chronic kidney disease (CKD) in adult patients. CKD causes the gradual loss of kidney function, which can lead to kidney failure.3

As a result, FibroGen’s (FGEN) stock price plummeted by the next morning. On July 15, 2021, FGEN closed the trading day at $24.84, but following the bad news, the stock price gapped down the next day, opening at $15.23 on July 16, 2021. FGEN eventually closed for the day on the 16th at $14.35 per share, representing a 42% decline from the previous day.

In Conclusion

In our conclusion, The biotechnology sector can be very beneficial for those who remain cautious and do their homework. It’s important to keep in mind that the unstable nature of biotech stocks is a double-edged sword, it benefits you but also can cut you, meaning these stocks can skyrocket high but also can free-fall to rock bottom if a drug fails to perform or come to market.

It’s best to say you have to consult an investment professional or financial advisor before purchasing biotechnology stocks. Doing your homework right as an Investor by deep research to determine the nature of the products, the company’s strategic advances, and the risks involved if the product doesn’t work can be beneficial to you. and lastly, always trade with a reliable broker.