Biotechnology Industry is Expected to Rebound, According to BIO/Thomson Reuters Investor Perception Study.NEW YORK -- The biotechnology industry is expected to rebound and outperform healthcare and the rest of the market this year, according to findings from an investor perception study released today by Thomson Reuters and the Biotechnology Industry Organization Biotechnology Industry Organization or BIO was founded 1993 in Washington, DC. James C. Greenwood is BIO's current President. External links
According to participants, who represent firms with $2.3 trillion in assets under management Assets Under Management (AUM) is a term used by financial services companies in the mutual fund and money management or investment management business to gauge how much money they are managing. , the credit crisis has shifted investors' focus with over 80% acknowledging that the effects have forced them to change their investment approaches. In particular, they have stated that a company's cash position is now more important. More than two-thirds in the study expect greater M&A volume in 2009, with major pharmaceutical companies buying biotech of all sizes and large biotechs buying smaller biotech companies. Additional key findings include: Investors are optimistic about biotech stock performance o 70% expect biotech to outperform the rest of the market this year. o 59% consider biotech "undervalued" while only 4% say the sector is "overvalued Overvalued A stock whose current price is not justified by the earnings outlook or price/earnings (P/E) ratio and thus, expected to drop in price. Overvaluation may result from an emotional buying spurt, which inflates the market price of the stock or from a deterioration in a ." o 57% expect biotech to rebound during this year; another 30% expect a rebound in 2010. Investors are less optimistic about research and development o 60% state overall productivity in 2009-2011 will be the same as in 2006-2008. Investors see the best opportunities in mid-cap companies with late-stage pipelines o 37% of polled investors see opportunity in micro-and small-cap companies, but only 16% favor early stage pipelines over late stage pipelines. o 67% of investors state the best investment opportunities lie in oncology while 37% see promise in immunology. In addition, the study found that most investors are neutral to positive about the policies likely to be pursued by the Obama administration. Investors are particularly hoping for greater consistency and predictability from the FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. where higher safety barriers and insufficient resources are cited as primary reasons for limited drug approvals. Most investors pay little attention to activism in the biotech sector, according to the study. Looking at what the 'smart money owns' is the least popular source of new investment ideas and least important for research. Meeting with management is the most important factor when researching investments, followed by conferences and sell-side research, which is still considered important. The perception study was conducted by Thomson Reuters, in conjunction with BIO's Investor Relations team, during December and January. It included over 80 participants representing firms with $2.3 trillion in assets under management and included $266 billion in healthcare and $76 billion in biotech. The full study will be released at the end of March. About Thomson Reuters Thomson Reuters is the world's leading source of intelligent information for businesses and professionals. We combine industry expertise with innovative technology to deliver critical information to leading decision makers in the financial, legal, tax and accounting, scientific, healthcare and media markets, powered by the world's most trusted news organization. With headquarters in New York and major operations in London and Eagan, Minnesota, Thomson Reuters employs more than 50,000 people in 93 countries. Thomson Reuters shares are listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE NYSE See: New York Stock Exchange : TRI); Toronto Stock Exchange Toronto Stock Exchange (TSE) Canada's largest stock exchange, trading approximately 1,200 company stocks and 33 options. (TSX: TRI); London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. (LSE LSE - Language Sensitive Editor : TRIL TRIL Tailored Repairable Items List (aircraft maintenance) TRIL Token Ring Interoperability Lab ); and Nasdaq (NASDAQ: TRIN TRIN Short for TRaders INdex. A technical analysis indicator calculated by taking the advances-to-declines spread and dividing that by the volume of advances to declines. Notes: If the value of this is less than 1, then it is considered to be a very bullish indicator ). For more information, go to www.thomsonreuters.com. About BIO BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world's largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. |
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