After a sharp drop in April, BioWorld’s Drug Developers Index is beginning to rise, although it is not yet showing what many investors would like to see, and it remains at one of its lowest points in 18 months.
While BioWorld’s Drug Developers Index appeared to be moving in the right direction last month, it did an about-face in April and is now at its lowest point this year, down 23.1%, following the same trajectory as both the Nasdaq Biotechnology Index and the Dow Jones Industrial Average.
A spring of hope has emerged for BioWorld’s Drug Developers Index (BDDI) with stocks moving in a positive direction in recent weeks, much in line with the broader markets. The BDDI is currently down for the year by 15.5%, but that is an improvement over the 21% decline at the end of February. Likewise, the Nasdaq Biotechnology Index and the Dow Jones Industrial Average are showing similar upward trajectories, but are still down by 11.1% and 4.2%, respectively. It is the first time this year stocks have begun to rise.
Stocks that make up BioWorld’s Drug Developers Index have tumbled by more than 17% since the start of the year, with only five of the 30 component companies showing a rise in share price. The Nasdaq Biotechnology Index and the Dow Jones Industrial Average also are down by 12.2% and 2.41%, respectively, indicating the biotech industry, which has experienced huge stock surges during the past two years, is now struggling, dropping more sharply than the broader markets.
While most of the 30 stocks that comprise BioWorld’s Drug Developers Index (BDDI) are trading down for the year, the three showing the most upward movement in 2021 include a company at the forefront of COVID-19 vaccine development, an RNAi therapeutics firm that became a multibillion-dollar acquisition target, and a neurological disease company with one marketed product.
After Moderna Inc. lowered its revenue expectations earlier this month, the company’s swollen stock price plunged over the next two weeks by more than 32%, signifying that BioWorld’s Drug Developers Index can no longer rely solely on one company to keep industry stocks in positive territory.
Biotech stocks and the overall market have taken divergent paths in the past month, not unlike what was seen throughout 2020, except this time, they are moving in opposite directions. While BioWorld’s Drug Developers Index (BDDI) appeared to be on the upswing only a month ago, it changed course in the final weeks of September.
Continuing an upward trajectory, BioWorld’s Drug Developers Index (BDDI) has climbed more than 10% since the start of this year, following sharp drops at the end of March and May. Shares began to rebound in June and the index has shown a steady incline, similar with the Nasdaq Biotechnology Index, which is currently up 12%.
Bioworld’s Drug Developers Index is at its highest point this year, up 4.99%, despite some index members receiving FDA complete response letters and reporting lower-than-expected sales within the last month. Moderna Inc., with its mRNA-1273 COVID-19 vaccine gaining more traction worldwide, is largely responsible for the rise, with its own shares (NASDAQ:MRNA) up nearly 285%.
Stock market exuberance, particularly in favor of an innovative industry working to pull the world out of the deadly COVID-19 pandemic, led to drug developers shares surging 30% in 2020. But if one thing is certain, it is this: Markets usually pull back and that is partially why BioWorld’s Drug Developers Index is showing only a 2.06% gain so far this year, in contrast to both the Nasdaq Biotechnology Index and the Dow Jones Industrial Average, which are up 6.28% and 10.96%, respectively.
