Biotech stocks are publicly traded ownership shares of companies that make medicines, vaccines and other biological products. The word “biotech” is often used interchangeably with “pharma.” Technically, this isn’t accurate — biotechnology is made from living things, while pharmaceuticals are made from chemicals.
Should you invest in biotech stocks?
Investing in biotech stocks can be risky because it's possible that a company's drug candidate proves ineffective or worse in clinical testing. And, even if testing goes well, biotech companies have no guarantee that a drug will be approved by the FDA.
What is a large-cap Biotech stock?
Large-cap biotech stocks typically have total market capitalizations of $10 billion or more. Many large-cap biotech companies have several different products on the market that treat different medical conditions. Amgen, for instance, is one of the largest biotech companies in the U.S., with a market cap of more than $100 billion.
