Will Biotech Be Good Bets in 2006?

Filed in archive Corporate and Industrial News , Patents and Intellectual Property Rights on January 6, 2006

It's the start of the new year and naturally, everyone wants to know: How do the prospects for biotechnology look like for the year 2006?

According to CNN Money, biotech will remain to be good bets, if the successes and potentials of companies such as Amgen and Genentech were to be based upon.

"These companies are Flush with new products and provide the best of confidence that the growth rate is sustainable," said Eric Schmidt, analyst for SG Cowen. "Compare that with the pharm space, where growth is single digits at best."

Also, in contrast to "Big Pharma", biotech still has a long way before it gives way to generics, primaryily because novel products and methods are involved.

Biotech investors are also unfazed by patent expirations, which often dog traditional drug companies when they start to compete against generic offerings. Biotech products are all relatively new. The specter of patent expiration is still decades away, say analysts.

However, Hanzhong Li, an analyst for Suntrust Robinson Humphrey, issues a caveat:

"Biotech is a volatile sector," said Li. "It's mostly clinical-data driven, and the biotechs have an equal chance of failing a trial than showing positive data."

Source and Photo: CNN MoneyRelated Story: How Big Pharma Did in 2005