In a Bad Year for Biotech Stocks, Deals and Vaccines Were Winners

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Some biotech investors have been thriving by focusing on mergers, short selling and Covid-19 stocks

There may be more of these kinds of deals in 2022, investors say, as cash-heavy pharmaceutical companies look to buy growing biotech companies. Smaller biotech companies may be more inclined to sell after suffering in 2021, the investors say.Biotech short sellers profited in 2021, as well.

Some traders lost money because they hedged their biotech portfolios with bets against the S&P 500, which is up over 20% on the year. Of course, Covid-19 vaccine stocks were the stars of 2021, though many have fallen sharply from recent highs.started the year over $100, approached $500 in the summer, and now trades around $275, still up sharply on the year.

After Merck’s Covid-19 vaccine candidates failed, the drugmaker partnered with rival Johnson & Johnson. WSJ reporter Jared Hopkins takes us behind the scenes, as the first Merck-made shots are released for distribution. Photo: Hannah Yoon/WSJ “Anything that’s Covid-related has done well, or at least held up,” says Brad Loncar at Loncar Investments, which created two biotech exchange-traded funds.

 

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