This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

A Time to Test Biotechs' Strength

Stocks in this article: BLUE EPZM XON AMGN ONXX NSTG PETX LPDX HTBX

If it is a bubble, then what investors most keenly want to know is, when is it likely to burst.

"I don't view it as a bubble," Drone said. "Industries go in and out of favor," he added, noting that the phenomenon of large full-service pharmaceutical companies facing holes in their drug pipelines from loss of exclusivity could give the biotechs quite a long run. "If a biotech company is attractive, then yes, there's going to be a significant positive upward push on its share price. The large pharma with an established commercial infrastructure can take that asset, even at the higher price, and commercialize it, so it's not that expensive to them.

Mendelson also said that while he doesn't "think it's unlimited," higher valuations probably won't slow down within the next three to four years.

Perhaps the high IPO rate for biotechs and heightened valuations won't end for a year, or more, but investors should definitely keep their eye on the marketplace.

As Schoenebaum said, "Think about what it means when a platform technology company is oversubscribed and trades up 50% on its first day. These are the kinds of things that happen when you look back historically and say, hey, that was a bubble. ... We are in a very, very, special time that raises some questions about when all this ends, and will it end badly or not?"

4 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,890.18 +85.38 0.48%
S&P 500 2,073.65 +3.00 0.14%
NASDAQ 4,777.5770 +12.1970 0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs