Is The Biotech Bubble Bursting?

Tyler Durden's picture


Having been among the best performing sectors of the stock market for so long (up around 70% alone last year), the moves of the last few days - and especially today - are extremely worrying for the 'trend-is-your-friend' momo-following fickle investing public. The Nasdaq Biotech index is getting monkey-hammered this morning and is now 10% off its late-Feb highs. Crucially, this sector has been a major pillar of strength for the overall Nasdaq and that means the Nasdaq is also getting crushed - now down 0.9% from the FOMC and dramatically underperforming.


The Nasdaq Biotech index is plunging today and down 10% from Feb highs...

Here are the biggest losers...


Which has smashed the Nasdaq lower and dramatically underperforming... (the Dow is rallying on the back of Visa's surge as news that the Fed upheld debit card swipe fee caps)


And across sectors since the FOMC there is only one winner - financials - (and 2 clear losers)... with Healthcare dominated by the Biotechs... one question - if builders are dumping on higher rates (which we presume means pressure on housing) then why are financials rallying (especially given the collapse in the curve and thus lower NIMs and lower expected loan creation)

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Fri, 03/21/2014 - 10:44 | 4576860 Bangin7GramRocks
Bangin7GramRocks's picture

No worries. They can just make it up on Monday. All-time highs again by Wednesday. Move along...

Fri, 03/21/2014 - 10:49 | 4576882 LawsofPhysics
LawsofPhysics's picture

Yes, everytime the "market" moves someone makes money (chances are its a TBTF bank with a perfect trading record, gee I wonder why?).

Fri, 03/21/2014 - 11:32 | 4577103 idea_hamster
idea_hamster's picture

Congress sent Gilead a letter asking it to explain how it priced its $84,000 Hep C drug.

Fri, 03/21/2014 - 16:59 | 4578500 mac768
mac768's picture

the law of gravity also applies to bbh

Fri, 03/21/2014 - 10:49 | 4576883 PHantomofthemarkets
PHantomofthemarkets's picture

Nothing to see here folks, buy along!

Fri, 03/21/2014 - 10:56 | 4576896 Dr. Engali
Dr. Engali's picture

Biotech isn't in a bubble. Gold is in a bubble. At least that is what the teevee tell me.

Fri, 03/21/2014 - 11:46 | 4577167 combatsnoopy
combatsnoopy's picture

Biotech is a HUGE fucking bubble.  I've heard people say they'd rather deal with bankers and that bankers are the nice guys compared to the biotech people.

First of all, the incubator for cancer is....well- LIPOGENESIS.  OR what is commonly referred to as "weight gain" or "gain in fat matter".
Stemming from either too many sex steroids, Gnrh in dairy, low thyroid activity (look into phosphorus and calcium), too much fat consumption---oh btw, don't bother with Omega 3's either if your thyroid activity is weak (thyroid cause the cells to uptake riboflavin which is a base for short chained fatty acid dehydrogenase- that is released by the same pancreatic beta cells that release insulin.  Short Chained fatty acid dehydrogenase blocks insulin that is released by short chained fatty acids.  Too much insulin is responsible for lack of weight loss, hypoglycemia, weight gain, spikes in LDL...)   The "medical" community wants us to believe that we're all suffering from too much glucose in the blood.  Basically, INFLAMMATION kills off the pancreatic beta cells causing hyperinsulinemia then prediabetes (Metabolic X Syndrome) then Type two diabetes.  Most of the time, it ends with hyperinsulinemia because it raises LDL and causes heart disease right there.

The thymus has insulin receptors. 
What happens to your immune system when the insulin levels are too high?

High insulin upregulates LH and FHS.  IT blocks myosin?  Follastatin and activin pushes up insulin and vice versa.

What triggers cancer? Malfunctions in the immune system?   Let's see, BPAs are responsible for stomach cancers in Japan.  Oral Contraceptives are responsible for breast cancer in women. 

It has already been shown that mutations in CCR5 null blood - transfusion of this blood actually cures HIV & leukemia.  Bristol Myers Squibb, another horribly overvalued company made an AIDs drug that was a little pricey? 
Why are the patronizing charitible foundations still begging for money for leukemia/AIDs/HIV research?   I'd rather my money go directly to that transfusion.    But nobody offered- so I'm left to believce that the charity money was embezzled.

IF the same cellular biology exists in rats as it is in humans (which is why we conducted so many studies on rats in the first place), variations in the human DNA won't make much of a difference here. 
As a matter of fact, this DNA thing is as creepy as someone looking for the perfect race.   Maybe we can clone Hitler!  

Maybe the Chinese already know first hand that insulin and glucose levels are not the same thing.  Since Sino-Pharmaceuticals has already partnered up with Bristol Myers Squibb on Metformin sales in China, and if the Chinese already figured it out (the Japanese- not their biotech but the people already have).... then this sale is a bust!  :)

Where's the need for biotech if good information and access to healthy foods/lifestyle fixes 90% of what's wrong with most sick people in the first place?   IS Obamacare enough to save it?   It won't make a difference. 

The "medical" community only innovated to mug people instead of save them.  That "value" won't be able to go far. 

Fri, 03/21/2014 - 11:54 | 4577212 Headbanger
Headbanger's picture

Waddya mean "MAYBE we can clone Hitler!"??

We already did... As a woman (I think) named... HITLERY!!

And you're right that the "medical" community doesn't want innovation as I have seen first hand while developing a revolutionary monitoring device which would save lots of post-op recovering time. But noooo.

Fact is, the "medical" community makes tons of money being inept so they get to try again on a patient.


Fri, 03/21/2014 - 11:56 | 4577217 aVileRat
aVileRat's picture

./slow clap

One of the best naildown's I have read on a retail stock board as to the pure bullshit that is the biotech sector.

Next to dot com's, the promotes on these fly by night lab monkey's is borderline pinksheet scams. Half of the public sector's phase trials are simple ignition trade fodder; less than 1 in 1000 of these drug equities will ever produce a product that will make it to an Onocology suite or local Pharmacy script. The cheerypicking of biochemical data to support their valuations would be illegal in any other applied science, ex: natural resources or aerospace where deleting your 'bad' results will end up with people dead and/or crippling enviromental damage + lawsuits. In biotech ? If your drug gives someone cancer and you know about it ? Just sell a bunch of puts and refile your chemical with another clincial hospital in 1 year. 

Fri, 03/21/2014 - 12:11 | 4577288 Colonel Klink
Colonel Klink's picture

Also affectionately known as the electric joo, especially when talking about Hollywood, wall street, or the mainstream media.

Fri, 03/21/2014 - 10:54 | 4576898 Atomizer
Atomizer's picture

Fixed the title heading for you Tyler.

Is The Biotech Muppet Investment Bubble Bursting?

Fri, 03/21/2014 - 10:57 | 4576906 The_Ungrateful_Yid
The_Ungrateful_Yid's picture
  • It's not 11:30 yet (e.s.t) algos still has time
Fri, 03/21/2014 - 11:00 | 4576925 ben_bernanke
ben_bernanke's picture

right when Tyler writes something like this it magically reverses...he really has to stop that

Fri, 03/21/2014 - 11:05 | 4576951 Skin666
Skin666's picture

The Revenge of Kevin Henry

Fri, 03/21/2014 - 11:12 | 4576995 LawsofPhysics
LawsofPhysics's picture

Or message all of us privately first.  I'd accept that.

Fri, 03/21/2014 - 11:35 | 4577118 KickIce
KickIce's picture

The SEC claims you've been Front running Tyler Durden, you're going to jail.

Fri, 03/21/2014 - 11:06 | 4576960 youngman
youngman's picture

Its the IPO bubble that has me worried....a guy with a game is worth 5 billion dollars...come on...this is worse than least they sold dog food or sometning...laid fiber optic they just have a toy...

Fri, 03/21/2014 - 11:09 | 4576974 Rising Sun
Rising Sun's picture

these joke fucking markets are really shining today - Dow up over 100, NASDAQ100 was down 27 at one point.


down to $55B per month, right Yellen???  you fucking liar!!!!!


this bitch is applying all that she can to keep this dogshit markets afloat - there is no limit.

Fri, 03/21/2014 - 11:12 | 4576991 Rainman
Rainman's picture

The financials are not in the muppet loan creation biz anymore. Too risky. That's an orphaned sector adopted by the goobermint's taxpayers.

Fri, 03/21/2014 - 11:13 | 4576996 HRamos_3
HRamos_3's picture

Maybe, i just covered my shorts...

Fri, 03/21/2014 - 11:16 | 4577015 SheepDog-One
SheepDog-One's picture

Wait....isn't this 'Nasdaq' thingy a scam invented by a guy now in prison convicted of fraud? How does it even still exist?

Fri, 03/21/2014 - 11:20 | 4577046 FuzzyDunlop21
FuzzyDunlop21's picture

Some of these companies are not half bad. For example the DNA sequencing technology of Pac Bio has many advantages over Illumina, and at basically the same price. If they decrease the error rate slighly I dont see any reason why anyone would still want to use Illumina. Over time it could be used for RNA-seq as well (and actually has been in one or two bleeding edge publications). So it actually makes perfect since its stock price would crater because having a good product and strong business model is a waste of time when you can just borrow printed money for free to buyback stock. Super bearish

Fri, 03/21/2014 - 11:24 | 4577069 Itchy and Scratchy
Itchy and Scratchy's picture

Need to find cure for selling!

Fri, 03/21/2014 - 11:53 | 4577206 1stepcloser
1stepcloser's picture

Who needs biotech or big pharma when everything is getting turn to ash?  Sunblock manufactures is the next bubble... Panama Jack get in while u can..

Fri, 03/21/2014 - 12:03 | 4577248 jomama
jomama's picture

did you seriously just call biotech a 'bubble'?

Fri, 03/21/2014 - 15:10 | 4578081 Dr. Destructo
Dr. Destructo's picture

Go long on e-coli in spinach.

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