Can These Former Biotech Growth Stocks Regain Their Form?
Biotech investing is a tumultuous process. Equities can stagnate for years while the multi-phase clinical process unfolds. And then, seemingly out of the blue, their share prices can explode higher following a positive trial result, regulatory outcome, or lucrative partnership. To come full circle, the once-high-flying equity tends to slowly but surely revert back to the mean due to the harsh reality of selling, marketing, and managing the lifecycle of a novel medication.
All that being said, biotech stocks in the middle of an important commercial launch or long-winded clinical trial can be powerful growth vehicles. Kadmon Holdings, for example, was essentially lost at sea until French pharma giant Sanofi swooped in to buy the company for a tidy $1.9 billion on a fully diluted basis. Biotech is chock-full of similar stories of early commercial stage companies floundering until a partner or suitor enters the picture. The lesson, if you will, is that investors shouldn't necessarily write off biopharma companies whose share prices have stagnated due to a commercial, clinical, or regulatory setback.
Acadia Pharmaceuticals (NASDAQ: ACAD) and Clovis Oncology (NASDAQ: CLVS) have both lagged behind the broader markets in a big way in 2021, even though they were super-charged growth stocks in the not-so-distant past. While there's no guarantee that either of these names will regain its prior form as a top growth stock, these two biotech companies do sport the type of key assets to spark a comeback. Here's a brief overview on the core value proposition of each of these stocks.
Source Fool.com
