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The biotech sector stood out last year and the NASDAQ Biotechnology Index delivered a stellar 34 percent return for 2014. It was an eventful year with mergers and acquisitions (M&As) and deals showing no signs of slowing down. Moreover, several companies came out with important and highly-awaited pipeline updates.
M&As, Licensing Dominate
Last year was one of the most active years where M&As and licensing agreements are concerned. While tax inversion deals were being actively pursued until a few months back, these cross-border deals do not look all that attractive now considering new rules imposed by the Treasury Department.
Most of the deals signed with big pharma companies are focused on cancer and immuno-oncology, which has been attracting a lot of interest. Immuno-oncology therapies have the potential to change the treatment paradigm for cancer -- they basically use the natural capability of the patient's own immune system to fight the cancer.
Q4 Earnings Mixed
The Q4 earnings season has been good so far for the health care sector, with total earnings up 21.4 percent on revenue growth of 9.1 percent with earnings beat ratio of 81.8 percent and revenue beat ratio of 63.6 percent.
Though patent expirations and a strong dollar took a toll on most of the pharma companies' revenues and profitability, they surpassed Zacks earnings estimates. Currency headwinds could become an obstacle for growth for the sector going forward.
Outlook Remains Bright
Strong pipelines, innovative treatments, impressive results, growing demand for drugs especially for rare-to-treat ...
Full story available on Benzinga.com
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