Biotechnology was a much sought-after sector following the pandemic, but it’s been having to adjust to a new normal since. Still, the sector offers growth potential as new and innovative biotechnology develops with more investment.
It’s been a rough last year and a half for the sector, according to a Fierce Biotech article. The sector was once dominated by special acquisition companies (SPACs) eager to get exposure to the next big thing in biotech, but that has since fallen.
“I think we should expect that this is the new normal,” said Stefan Vitorovic, co-founder and managing partner of Vida Ventures. “Now I think it’s interesting — everyone becomes a prognosticator. Nobody wanted to be one when the markets were toppy.”
Still, that doesn’t mean that the sector isn’t rife with potential investment opportunities. The sector is going to simply adjust to this new normal and a market correction per se is a healthy event for biotech moving forward.
“So there’s that sort of rational allocation of value as you go down the development path,” said Maha Katabi, general partner at Sofinnova Investments. “And so that’s the reflection of a normally functioning biotech market and a normally functioning investor environment.”
An ETF for High-Growth Potential in Biotech
One way to capitalize on potential growth in the biotech industry is to get an exchange-traded fund (ETF) that encapsulates that exposure. One such fund worthy of consideration is the Global X Genomics & Biotechnology ETF (GNOM).
GNOM seeks to provide investment results that correspond generally to the price and yield performance of the Solactive Genomics Index that is designed to provide exposure to exchange-listed companies that are positioned to benefit from further advances in the field of genomic science and biotechnology, as well as applications thereof (collectively, “Genomics & Biotechnology Companies”), as defined by Solactive AG, the provider of the underlying index.
GNOM provides investors with:
- High Growth Potential: Genomic sequencing and genetic medicines & therapeutics are helping transform health care in key areas with growing demand, including drug development, precision medicine, and more.
- Structural Tailwinds: The cost of genomic sequencing has dropped from nearly $100mm per genome in 2002 to less than $1,000 in 2020. Adoption has continued to rise, as costs plummet.
- Targeted Exposure: GNOM provides global exposure to emerging areas within the Health Care sector, at the intersection of science and technology.
For more news, information, and strategy, visit the Thematic Investing Channel.