What happened

Drug stocks soared on Friday with the overall stock market rebounding from Thursday's historic sell-off. Several also spiked near the end of the day today as President Trump held a news conference where he declared a national emergency that he said would "open up access" to up to $50 billion to fight the COVID-19 coronavirus. 

Among the biggest drug stock winners were Emergent BioSolutions (EBS 3.32%), which vaulted 22.2% higher. Shares of Momenta Pharmaceuticals (MNTA) jumped 17.8%. Biogen (BIIB 0.62%) and Mylan (MYL) stocks each closed the day up 13.5%. BioMarin Pharmaceutical (BMRN 1.62%) rose by 10.1%.

Businessman pointing to a candlestick stock chart trending upward

Image source: Getty Images.

So what

More than anything, Friday's stock market action indicated that many investors realized that shares of many companies had become attractively valued considering their long-term prospects. Trump's press conference also seemed to inspire a degree of confidence that the federal government would take decisive action to mitigate the coronavirus outbreak.

Stocks of drugmakers that have COVID-19 programs under way especially benefited from the relief rally. Emergent BioSolutions, for example, announced earlier this week that it's partnering with Novavax to attempt to develop a COVID-19 vaccine.

Biotech stocks such as Biogen and BioMarin and pharmaceutical stocks like Momenta also performed well on Friday. These companies make drugs that will be needed by patients regardless of what happens with the pandemic.

Even shares of drugmakers that could be negatively affected by the outbreak rose. Case in point, Mylan's stock climbed despite the company's warning in late February that its supply chain could be impacted by the coronavirus.

Now what

Does Friday's rebound mean that these drug stocks have turned the corner? Not necessarily. There's likely to be significant price volatility among them for weeks and perhaps months to come.

However, it's important for investors to focus on companies' business fundamentals, not on stock fluctuations. Even if the market resumes its downturn in the near term, the long-term prospects for many businesses -- especially drugmakers -- remain strong.