The biotech sector is having a stonking week.
The Nasdaq biotech index, which tracks the more than 160 biotech and pharmaceutical companies listed on the Nasdaq exchange, is up 7.14% since June 14.
It’s the biggest upswing the industry has had since the presidential election, when stocks were up 13% the week after the election after President Donald Trump’s win signalled a possible reprieve on the topic of drug pricing.
Since the election, though, Trump has said that drugmakers are “getting away with murder,” and has expressed an interest in negotiating drug prices, something the government isn’t allowed to do for Medicare and Medicaid. The comments have sent biotech stocks falling in the past.
But according to reports from Kaiser Health News and Politico, the Trump administration is preparing an executive order that’s shaping up to be a lot more favourable to drug companies. And on Tuesday, The New York Times reported on the contents of a draft of the executive order, reaffirming the administration’s likely more relaxed, industry-friendly stance on drug pricing. That sent the biotech index soaring again on Wednesday.
Morgan Stanley attributed some of biotech’s strength to a shift in investors out of the energy sector and into biotech and tech, as well as some company-specific good news.