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.