Is the great biotech stock rally kaput?

While biotech IPOs continued strong last week as shares of Versartis ($VSAR) climbed 49% on its opening day, analysts and investors were left chewing on a nasty drop in the Nasdaq Biotechnology Index on Friday. The Index has soared 369% since the bad old days of 2009, as Bloomberg points out. But recently it's tanked 9.7%, leaving the measure just one bad day away from an official correction. Needless to say, the downward lurch in stock prices has the bulls and bears at each other's throats. Evidently the bad case of market jitters on Friday was triggered by a letter from a group of lawmakers demanding to know why Gilead ($GILD) is pricing its revolutionary new hep C drug at $84,000. And the whole sector is buoyed by the fact that new drugs can command some very high prices--at least in the U.S. Any serious threat to that would have a wide-ranging impact on the industry. Just don't look for any quick resolution to the debate over sustainable drug prices. Story

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