The biotech industry has taken a beating lately, and this is evident in Monsanto’s numerous actions of late. The company has closed 3 research and development sites, laid of thousands of workers, and their stock prices have been plummeting. Though Americans take more drugs and pay more for them than any other country in the world, 90% of clinical trials for new drugs are rejected. Will finding Big Pharma’s next big, profitable, and successful drug be like “looking for a needle in a haystack?”
It looks like Monsanto isn’t the only company feeling the pinch lately. The entire sector is going off the rails. Two icons of the Western Medical healthcare industry have seen some dark days on the stock market lately. Valeant Pharmaceuticals has suffered an almost 40% stock loss in just over a month, and their quarterly earnings growth projections are looking dismal at -82%. Theranos, a $10 billion dollar blood-test company’s earnings look equally as bleak.
Therano’s recent stock dive is likely linked in part to some seriously negative publicity.
The company has had questions raised about the efficacy claims of its blood tests. Valeant has had questions raised about its business practices, such as its relations with specialty pharmacy Philidor – which have drawn the attention of US Congress.
These allegations are still being investigated to find out if they are accurate, but the fallout from the negative publicity of the two companies is tapering investor excitement about the prospects of the healthcare sector. Add Monsanto’s latest woes to the mix and it makes sense that Federal Reserve Chair, Janet Yellen, would claim that the biotech bubble could burst any time. Pop. There it went.
This article originally appeared at Natural Society.