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Is This a Biotech Dip, Correction, or Time to Panic?

Biotechs have dropped dramatically over the last week. The impetus seems to be worry about pricing for Gilead Sciences' (NASDAQ: GILD  ) hepatitis C drug Sovaldi that could create an opportunity for AbbVie (NYSE: ABBV  ) , which is developing a hepatitis C regimen of its own.

While losing pricing power would be bad for the industry, there's likely more going on here. As Fool contributor Brian Orelli and health-care bureau chief Max Macaluso discuss in the video below, biotech valuations have been a bit inflated, so much of the decline could be due to investors itching to take profits.

The decline could be an opportunity to pick up share in a company such as Regeneron Pharmaceuticals (NASDAQ: REGN  ) , which is up more than 550% over the last three years. It can be hard to pull the trigger when a company is flying high, but the downturn provides an opportunity to buy shares at a discount.

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Brian Orelli

Dr. Orelli is a Senior Biotech Specialist. He has written about biotech, pharmaceutical, and medical device companies for The Motley Fool since 2007.

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Related Tickers

8/31/2015 4:00 PM
ABBV $62.41 Down -1.57 -2.45%
AbbVie Inc. CAPS Rating: ****
GILD $105.07 Down -2.71 -2.51%
Gilead Sciences CAPS Rating: *****
REGN $513.50 Down -23.20 -4.32%
Regeneron Pharmace… CAPS Rating: ***