The circuit breakers activated almost immediately when the markets opened this morning as the Dow plummeted, with investors moving into cash and away from equities. Clearly, they were not impressed with the Federal Reserve’s decision to slash its benchmark interest rate to nearly 0% to help combat the economic fallout from the coronavirus outbreak.
According to an analysis conducted by BioWorld of the fourth-quarter and year-end 2019 financial reports filed by the top 100 public biopharmaceutical companies ranked by market cap, and excluding big pharma companies, the amount that was invested in research and development (R&D) during the year increased 35% compared to the same period in 2018.
The financial markets were delivered a one-two punch March 9 – a plunge in oil prices along with fears that the coronavirus is continuing to spread unabated. As a result, the Dow Jones Industrial Average cratered 1,500 points in early trading after a brief halt with market circuit breakers kicking in. Biopharma equities did not escape the carnage, with the BioWorld Biopharmaceutical index trading down about 4% by market close, with the Dow closing down 7.8%.
Concerns about the escalating global spread of COVID-19 panicked the markets big time at the close of the month. With investors rushing to the sidelines, it only took five days for the Dow Jones Industrial Average to drop more than 10% from its all-time high, getting close to the 30,000 mark.
The public attention that COVID-19 has received has spilled over to antibiotics companies, and the BioWorld Infectious Diseases index has grown 14% in value since the beginning of the year.
Investors continue to keep a close eye on the progress of companies involved in developing medicines targeting the central nervous system and, in the main, their reaction has been generally positive. The BioWorld Neurological Diseases index, a price-weighted index of public biopharmaceutical companies that are focused on developing therapies to treat neurological diseases, closed the year up over 16% and after, a dip in January, is now tracking up more than 12% by market close on Friday Feb. 21, well ahead of the general markets for the same period.
