Opinion: Is the golden age of biotech stocks over?

Much of the last decade felt like the golden age of biotechnology investing. Money — lots of money — was poured into new gene therapies that replaced defective genes with healthy ones, immunotherapies that were game changers for people with cancer, innovative medicines for rare diseases and HIV, and more. The returns on biotech stocks were phenomenal.

The Food and Drug Administration approved 378 new drugs between 2010 and 2019, a big chunk of which were cancer medicines. Biotechnology companies played a big role in developing many of these new treatments, and their successes could partly be seen in the stock market, where biotech stocks soared. In fact, the iShares Biotechnology ETF returned 351% in the decade ending December 31, 2019, beating the high-tech-laden Nasdaq Composite, which returned 343% during the same period, and trounced the S&P 500’s 257% return.

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