A new report by Leerink Partners contends that Donald Trump’s 2005 Access Hollywood conversation – and the increasing chances of a Democratic takeover of Congress – have caused biotech stocks to drop as much as 7% and cost investors $50 billion.
According to the report: "The spike in odds of Democratic House victory after the Trump tape release (TTR) was initially shrugged off by the market, but after Columbus Day, this prospect has weighed heavily on stocks in the biotech sector. It appears that each 100bps increase in the odds of Democratic House victory was associated with a 150bps loss in relative value for the biotech group. TTR biotech selloff cost investors $50bn."
The advisers and lobbyists that the Leerink analysts spoke to agreed that a Democratic House would allow the party to potentially implement policies that were more adverse to the interests of the pharmaceutical industry, including proposals for drug-price reduction and more extreme ones such as government-mandated price restrictions.
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