Drug stocks have been a volatile group since the beginning of 2016, with many selling off and still, more than a year later, struggling to recover what they lost. Meanwhile, the broad-based S&P 500 has moved substantially higher.
It’s not hard to understand why investors view the drug industry with such skepticism. Most drug developers aren’t profitable on a recurring basis, meaning valuations can be prone to wild swings based on the emotions of investors and the clinical data being released.