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Biotech stocks — a healthcare subsector focused on developing drugs, treatments, and therapies for medical conditions, diseases, and viruses — carry outsized return potential tied directly to FDA approval decisions, according to a sector overview published by Benzinga.
A successful approval can double or triple a stock's value overnight, while years of clinical trial work can yield nothing if regulators reject a candidate drug. FDA Approval Cycle Defines the Risk Profile The U.S.
Food and Drug Administration requires submission and review of every new drug before it reaches pharmacy shelves.
Biotech firms can spend years in clinical trials without a guarantee of clearance, and some drugs never reach market despite extensive testing.
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