Biotech companies are an irresistible gamble for some – Wall Street Journal

Small biotech companies are not a safe haven, but that doesn't seem to matter to investors who want to be part of medical advances (and who love a bet).

Published on:

06 Aug 2020, 2:31 pm

Why do investors fall in love with biotech companies? In the time of the Covid-19 pandemic, at least one aspect must be the sense of being part of the process of finding ways to live with (or perhaps even cure) the virus. But for others, it is the volatility of the stocks: it's like a casino, says one investor. One United States company that is attracting a lot of attention is CytoDyn, which has been has been seeking official approval for a drug called leronlimab (which it says will combat HIV and about two dozen types of cancers) over the better half of a decade. Now the company says the drug can also combat the novel coronavirus. CytoDyn's valuation ballooned to more than $4.5 billion in May from just over $100 million last year, after the Food and Drug Administration approved the use of leronlimab for Covid-19 patients in emergency situations and clinical trials. But there is skepticism – the company hasn't made any money other than what it pulls in from stock sales. That isn't stopping investors though. – Renee Moodie