US biotech industry expected to rebound, survey shows

US investors have accurately forecast the rebound of the biotechnology industry, but underestimated the degree to which positive clinical trial data would drive the sector higher, according to findings from an investor perception study released this month by the Biotechnology Industry Organization (BIO) and Thomson Reuters. The report can be accessed at http://www.bio.org/edocs/BIO_ThomsonReuters09_study.pdf.

Although the study participants indicated 'an increase in positive clinical news' as the second likely catalyst for a rebound, they softened that view with the assertion that overall research and development productivity in 2009-2011 would be the same as 2006-2008.

'Investors had forecasted a 15% rise for biotech stocks by mid-year, and in fact that proved quite short of the impressive gains that we have seen in the last several weeks,' said John Craighead, managing director of investor relations and business development at the BIO.  'Moreover, to the extent that this rally has been driven by positive trial results, it is a better sign for the long-term vitality of the biotechnology industry than the other catalysts investors had cited, such as mergers and acquisitions or an improvement in general market sentiment,' he added.