After a difficult 2023, biopharma investors won’t necessarily have it any easier in 2024, analysts at UBS argued in a note to clients on Tuesday.
“BioPharma investors will be happy to shut the door on a tough 2023,” the analysts wrote, noting that the sector declined more than 5% during the year.
“However, as we exit the year, the Fed's pivot towards rate cuts is shifting market narratives and renewing hope that negative sentiment in the sector can start changing.”
That optimism may be misplaced, UBS argued.
“For Pharma we expect 2024 to be another challenging year across our coverage,” the analysts wrote. “We see an election year and [the Inflation Reduction Act] expected to keep new money or generalist investors offside.”
UBS did note that it sees more promise in commercial-stage biotech companies.
The company also said it expects continued outperformance from Eli Lilly and Co (NYSE:LLY), “with consensus upgrades likely for Zepbound/Mounjaro, and continued catalysts throughout the year (NASH and sleep apnea in 1H24; Heart Failure mid-24).”