Factors affecting the NASDAQ Biotechnology Index
The NASDAQ Biotechnology Index reached a three-year high in the first half of 2002. Analysts attribute this to optimism over the likelihood of lower interest rates. Successes in the field also contribute to the index’s rise. Recently, core companies have unveiled innovative solutions that have caught the attention of investors.
The biotechnology index has been volatile in recent years. This is visible in its indicators:
1. The index’s worst period was October 2023, when it fell to a low of 3,637 points.
2. It then gradually rose, reaching 4457 points at the beginning of 2024.
3. The second quarter was not very good for the index. It fell to 4056 points in April but quickly recovered to 4634 points.
Analysts believe the index is showing good momentum and expect it to rise steadily in the near future.
Precedence Research published an analysis of the global biotechnology market. According to the study, it will grow until 2033. The average annual growth rate will be 11.8%. The value of the sector will reach USD 4.25 trillion by that time. Experts believe that the main drivers of market growth are:
– government support;
– increased investment in the industry;
– growing demand for synthetic biology solutions;
– the global rise in chronic diseases such as cancer and hypertension.
These factors will drive the sector in the coming years. Biotechnology’s importance is growing every year, fuelled by the rapid development of artificial intelligence.
Overview of promising stocks in the sector
In 2023, the shares of the largest biotechnology companies on the NASDAQ showed high growth. The site’s specialists analysed the growth dynamics in the securities value of several core businesses. The sample included companies with a market capitalisation of between USD 50 million and USD 500 million. The rating led by:
1. Elevation Oncology. Since the beginning of 2023, the company’s value has increased by almost 417%. Capitalisation reached over USD 152 million, with a share price of USD 2.8. The company develops drugs for the treatment of cancer.
2. Candel Therapeutics. The company’s capitalisation is around USD 171.7 million. Compared to the previous period, the growth was 288%. The share price has reached USD 5.8. The company also develops treatments for cancerous tumours.
3. Benitec Biopharma increased its valuation by 201% to USD 90.6 million during the year. The share price was around USD 9.7 per share. The company specialises in the treatment of chronic and life-threatening diseases.
The valuation included Eliem Therapeutics, Cardiol Therapeutics, and others. The successful completion of new drug trials primarily drives investor interest in these companies.
