How to Ride the Biotech Roller Coaster

With stocks starting to price in interest-rate cuts next year, the biotech sector has emerged as a winner for investors seeking riskier bets with more distant payoffs.

But investing in this industry is tricky because biotech is a sector of haves and have-nots. While every industry has its winners and losers, the gap in biotech is bigger due to the binary nature of drug development. Many companies spend years testing one medical approach or platform. In the end, either the idea works or it doesn’t, and that could be the difference between tripling your investment or losing it all.