All economic growth cycle has stages. If the industry is not new, as with biotechnology, usually comes from a long trek through the desert where nobody wants or hear about investing in it. In the case of changes, come from the phase of euphoria in 2000, when the announcement of the human genome sequence shot contributions biotechnology companies worldwide. In Spain we had our particular local mini-episode Zeltia. That turned into a bubble, with stratospheric valuations for an industry which still had many years to be really competitive. Experts begin selling and went into a tragic phase. Many lost a lot of money around the world. Biotechnology lost interest. In Spain, many were left with Zeltia and / or Puleva Biotech worth 30% to 60% less than it was worth. And years went by without recovery. The people, the weak hands, swore never to invest in bios. But things are changing. The reasons why those companies achieved huge market prices remain, some have already commented in the previous post: The boom in the elderly: an investment opportunity?
In these seven years, industry has also matured and business prospects are improving. The first sign of this change in perception is that strong hands are taking positions, the great fortunes begin to see the sector differently. For example, BBVA wealth manager, a unit aimed at customers with more than two billion euros of assets, said in an interview that they are already preparing to take positions biotechnology . Strong hands are always ahead.
The second sign of change, is that prices start to rise. The Amex biotech index has risen this year, so far, 15.3%, four percentage points higher than the S & P500. Some companies, like those who work in RNA interference technology, technology that has won the Nobel Prize for Medicine this year have risen by 321%, and Sirna Therapeutics and Alnylam Pharmaceuticals, more than 50%. Yet this increase is hardly noticed. Still have not even caught our biotechnological Zeltia, for example, loses this year, more than three percentage points, and that in a great year for stocks. This can mean two things: one, that the English business cycle is delayed by about 9 months with the U.S. cycle and the infection will come next year. Two, that the English biotechnology has lost the car of progress and that no Biotechs can be invested in Spain because the companies that have garnered the most valuable patents are in the United States. My opinion? There is something of both, but that we'll talk later, if no chance ...
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