NEW YORK — Biotech stocks took a turn for the worse in 2009 as the major players dealt with regulatory, manufacturing and political issues as well as a deep recession, but their fortunes could turn this year if they get added patent protection.
They were the exception in what was otherwise a bullish year for health care stocks, which benefited as investors sought defensive plays in a turbulent market.
Biotech stocks were the laggards of the Standard & Poor’s 500 Health Care index, on track to post a more than 8 percent loss for the year, while the rest of the health care sector has logged gains of up to 64 percent, according to FactSet Research Systems.
The decline in bellwethers such as Amgen and Genzyme was a key factor in weighing down the overall sector. On a broader scale, concerns included a backlog of drug approvals at the Food and Drug Administration, a decline in buyout activity, and fears over health care reform. That reform could come early this year as Congress convenes to merge two approved bills.
Although the S&P 500 index was on track to gain about 23 percent last year, its large biotech components were down about 8.3 percent.
The Nasdaq Biotechnology Index, with a broader array of biotech companies, rose 15 percent, but that pales in comparison with the broader Nasdaq composite, which is set to gain about 44 percent.
The slide was exacerbated on concerns that a proposed system for regulating biosimilars, or copies of biotech drugs, might sway in favor of generic drug developers. Congress is still debating the issue, though current legislation points to biotech drugs receiving closer to 12 years of market exclusivity.
