The biotechnology industry is exciting, full of hope and many great successes and failures. It holds the potential to cure cancer and other dreaded diseases -- which is, of course, very enticing. Still, as many investors have learned, there are more than a few good reasons to hate biotech stocks. Let’s delve into some.
Because ones you’ve never heard of will skyrocket
One reason to hate biotech stocks is that while you’re sitting and waiting for your solid blue chip stocks and your healthy dividend payers to gradually appreciate, as they tend to do, you’ll invariably see a biotech stock that you’ve never heard of suddenly skyrocket. Exelixis (NASDAQ:EXEL), for example, has roughly doubled over the past year. Its Cabometyx drug (which in a slightly different formulation has been in use treating thyroid cancer) recently won FDA approval to treat kidney cancer, and investors (and patients) are waiting to see how it fares in other trials and whether it will be approved to treat liver cancer, among other cancers. Similarly, Eagle Pharmaceuticals sextupled in value in 2015 after inking a deal for its leukemia and lymphoma drug Bendeka.
