Why Big Investors Aren’t Betting It All on a Coronavirus Cure

As drug companies race to discover treatments for the new coronavirus, big investment firms are placing cautious bets on likely winners. Hedge funds and venture-capital firms, which are in the business of predicting the future for companies and economies, are growing more confident researchers will develop effective drugs to fight the pandemic. Yet, successful efforts that could help millions—or even billions—of people, might not result in big profits for shareholders, the investors argue. Some are even placing bearish wagers on pharmaceutical companies they believe are attracting excessive excitement over their progress on Covid-19 treatments. “Most of the stock prices don’t bear semblance to reality,” says Joseph Edelman, who runs Perceptive Advisors, a $4.2 billion New York hedge health-care fund, which is focused on what it sees as the disconnect between the price of stocks like drug company Gilead Sciences Inc. and their potential profits from any treatment or vaccine.

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Source: https://www.wsj.com/articles/why-big-investors-arent-betting-it-all-on-a-coronavirus-cure-11589481346

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