Calling the top? Ever-rising valuations spark biotech worries

Date April 25, 2013

Two rather innocuous events – disappointing earnings for Amgen and reports of infections in a compound similar to the just-launched Tecfidera – seem to have investors increasingly looking at the tape for signs that the biotech market has topped out. With sellside analysts at a loss to explain the persistence of the bull run, even the whiff of a safety worry for 2013’s biggest launch takes on a greater significance.

In March the Nasdaq biotechnology index surpassed its previous high, set during the heady genomics-driven bubble in 2000 – a touchstone for the sector. The debate over valuations now centres on whether they deserve to continue rising because of improving pharma and biotech R&D productivity, or whether a few successes have made investors overconfident.

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