Big Pharma won’t save defeated biotech

The stock market may be in the doldrums, but the biotech index has fallen off the cliff. One measure says it all: Dozens of publicly traded biotechs have dropped in price so much that they are now valued at less than the cash they have in the bank.

Some healthcare investors have pointed to that trend as a sign that things have begun to bottom out. The argument is that biotech has become so cheap that the major pharmaceutical companies — staring at the cliff of patents and armed with hundreds of billions of dollars in dry powders to buy back — will come to the rescue. Indeed, a popular biotech exchange-traded fund, the SPDR S&P Biotech ETF, has recovered about 20% from recent lows. Big Pharma won’t save defeated biotech

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