Healthcare Companies Capitalizing on a Resurgent Biotech Industry

LAS VEGAS, March 20, 2018 /PRNewswire/ --

FN Media Group Presents Microcapspeculators.com News Commentary 

The healthcare sector has always been one of the best performing industries in the stock market over the last several decades. In fact, since 1963 the healthcare sector has generated an annualized rate of return of 11 percent. Included in today's commentary: Endonovo Therapeutics, Inc. (OTC: ENDV), Athersys, Inc. (NASDAQ: ATHX), Caladrius Biosciences (NASDAQ: CLBS), ARCA Biopharma, Inc. (NASDAQ: ABIO), Geron Corporation (NASDAQ: GERN).

Over the last decade, the S&P 500 biotechnology sub-industry index has risen 344%, compared to a 102% increase for the overall index as of this month, according to an article on Morningstar.

However, over the past three years, the sector has taken a big hit due in part to the extraordinary returns the sector generated over the last few years leading to high valuations and profit-taking from some investors. Conversely, two factors probably had an even bigger impact on the sector: politics and drug development cycles.

With a more business-friendly administration in office, the fear of drug prices being capped and significant changes occurring to the healthcare system has largely waned. At the same time, the drug cycle that fuel biotech stocks to new heights over the last few years ended. According to Eddie Yoon, manager of Fidelity Select Health Care, new medicines were only beginning to materialize in 2012 and 2013, and only began generating revenues in 2015 and 2016. Simply put, the biotech sector tends to move in cycles and is fueled by new medicines hitting the market and then generating significant revenues, i.e. the hepatitis C medicines and immunotherapies.

Over the last couple of years, the sector has had to reignite its fire and begin to gain momentum as new promising therapies approach the market. These new revolutionary medicines include cell therapies, where living cells, such as stem cells, are injected into patients to treat diseases like heart failure. In one case a completely new field of medicine has emerged, called bioelectronic medicine, which seeks to treat diseases by stimulating nerves and tissues to using electrical signals to reduce inflammation and promote healing.