Biotech stocks one of the decade's best investments

Biotechnology stocks were some of the best investments of the decade thanks to quicker clinical innovation and discoveries of several breakthrough treatments, according to CNBC

Someone who invested $1,000 in biotechnology stocks in December 2009 would now have $4,500, an increase of 350 percent. 

In comparison, the broader stock market was up 187 percent over the same time period. 

The increase in biotech stocks can be partially attributed to the discovery of treatments once thought beyond the reach of modern medicine, according to CNBC. Breakthroughs in drugs to treat such diseases as hepatitis C, multiple sclerosis and others helped fuel stocks. 

The discovery of these treatments is partially due to drugmakers being more open to pursuing and investing early. A positive trial in phase II or phase III in the drug development process, or a good review from the FDA, could transform a drugmaker from a money-losing company to a multibillion-dollar success overnight, according to CNBC.

On the other hand, an unexpected FDA rejection or ineffective trial can cause fast, steep declines in stock value. 

A faster-moving FDA also helped boost biotech stock value in the last decade. In previous years, very few drugs received expedited approval, but in 2018, 73 percent of all approved drugs have made it through the FDA's fast-track program, according to CNBC. The program allows drugs to reduce the number of analyses conducted by regulators or skip them altogether.

The FDA says its fast-track program allows drugs to reach patients with the greatest medical needs, who often have no treatment options, quicker.

Analysts told CNBC they expect biotech stocks to maintain their upward momentum in 2020. 

Read the full article here

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