Nearly eleven months ago today, a rally in the biotech sector was stopped dead in its tracks when Hillary Clinton tweeted about ‘outrageous’ ‘price gouging’ in the pricing of medications and treatments. If you owned stocks in the sector back then, the scars of that tweet ‘heard around the biotech world’ are likely still healing. The Nasdaq Biotech Index ultimately fell over 30% from those levels, bottoming out in early January. It tested those lows in June but has subsequently rallied nearly 25% since then.
Well, it appears as though Mrs. Clinton has once again had enough of the rally in biotech stocks. Earlier today, she tweeted that there was ‘no justification’ for the price hikes in Mylan’s Epipen, and once again the tweet echoed across the biotech world. Not only Mylan declined, but the rest of the specialty drug/biotech sector followed suit and fell more than 3.5% for its worst day since the Friday after the surprise Brexit vote. With Wednesday’s decline, the Nasdaq Biotech index also traded below 3,000 for the first time this month. If you are long the biotech sector, today’s action was an uncomfortable moment of deja vu.