Sector rotation and fund outflows weigh on biotech stocks, but positive developments allow fund raising to strengthen industry

The first half of 2023 has been disappointing for biotech investors. A massive rotation has put biotech stocks under pressure. Whereas positive developments ranging from M&A activity and new drug approvals to clinical trial readouts have hardly had an impact on investor sentiment towards the sector, any missteps, milestone failures for example, have often triggered heavy selling. In a positive sign, biotech funding activities have picked up again. A number of companies have been able to raise fresh capital thanks to positive news announcements.