Biotechnology is one the strangest, scariest, sexiest and most interesting corners of the stock market. In how many other industries are companies striving to literally save lives? Any industry can host a stock that could potentially double, but what other industry can match biotechnology in the sheer number of stocks that could double if their companies' plans all come to fruition?
On the other hand, in how many other industries do companies burn through hundreds of millions of dollars, often with nothing to show for it? How many other industries rely on scientific arcana that can be challenging to even highly qualified Ph.D.s? And how many other industries sport a warning label that reads “Caution: Poor stock selection may cost you 90% of your initial investment”?
For all those reasons and more, biotechnology is a fascinating industry for investors to explore. (For a background reading, see
The Ups And Downs Of Biotechnology.)
What Is Biotechnology?
In a nutshell, biotechnology is an industry that focuses on novel drug development and clinical research aimed at treating diseases and medical conditions. Biotechnology companies are almost always unprofitable (some suggest that the distinction between “biotech” and “pharmaceutical company” lies in profitability), and many have no real revenue at all.
To read the full piece, please go to:
http://www.investopedia.com/articles/fundamental-analysis/11/Primer-on-Biotech-Sector.asp
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