The biotech sector has long been the investors’ darling and the stocks saw an enormous run from late 2011 till this past summer, rising 340%. But the recent global market rout took away the sheen away from the sector, which faced a double whammy when Democratic Presidential candidate Hillary Clinton tweeted on drug price limits and increased regulatory.
The tweet led to a brutal seven-day sell-off, sending the Nasdaq Biotechnology index into a deep bear territory with a decline of more than 25% from its July highs. With this, the index wiped out all of its gain made this year. While investors may want to consider staying on the sidelines for the time being given the bearish trend, risk tolerant long-term investors could consider this slump a buying opportunity, should they have the patience for extreme volatility.