President-elect Donald Trump had some harsh words for the biotech industry at his first press conference since his election, affecting both health and biotech shares. This will undoubtedly sour Trump biotech relations, as well as clearly define the industry as being a target of the new administration versus being counted favorable as what we refer to as a “Trump stock.”
“We have to get our drug industry coming back. Our drug industry has been disastrous, they’re leaving left and right. They supply our drugs but they don’t make them here, to a large extent,” Trump said.
“And the other thing we have to do is create new bidding procedures for the drug industry, because they’re getting away with murder.”
The iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) fell briefly over 2.5%. Several other big names in the biotechnology industry were also hurt by Trump’s words. Endo International plc (NASDAQ:ENDP) declined steeply after the press conference, for example, adding further injury to an already down day. The stock fell 10% as of this writing.
CNBC reports that “Health care dropped more than 1.5 percent as the worst performer in the S&P 500, with the pharmaceuticals sub-sector down more than 1.5 percent and the biotechnology sub-sector off nearly 3 percent.” (Source: “Trump says drugmakers are ‘getting away with murder,’ and biotech stocks plunge,” CNBC, January 11, 2017.)
The volatility of the soon-to-be Commander in Chief of the U.S. has affected markets in the past, making for an interesting Trump stock dynamic.
While some shares can count themselves as treasured by the President-elect, others are not as fortunate to consider themselves a Trump stock. It seems that the biotech industry, at least for now, will have to be on the outside looking in on that venerable club of Trump stock companies.