Hot topic: Don’t mention the war!

For Britons of a certain age, the phrase “Don’t mention the war” needs no introduction. 

It’s the most famous line from the most famous episode of the 1970s comedy series Fawlty Towers, in which an inept British hotelier manages to repeatedly insult his German guests. 

The line is now sometimes used here as a coded instruction to avoid any difficult or awkward subject. 

But it can be used literally too. 

So, is there a degree of “Don’t mention the war” happening in biotech markets right now? 

Since war in the Middle East erupted at the end of February, the FTSE All-World Index is down around 6%, as is the Dow Jones Industrial average. 

Meanwhile, the XBI index of US biotech stocks is down just 4% – the same as NASDAQ. 

We often hear that biotech markets can be particularly sensitive to “external shocks” – and the Strait of Hormuz being forcibly blocked is a pretty big shock. 

So the sector’s relative resilience is noteworthy. 

So too is the fact there haven’t been that many column inches dedicated to the war in the Middle East in biopharma trade publications. 

Which begs the question: are biopharma investors and commentators not mentioning the war because they don’t want to raise an awkward subject? – and hoping it’ll blow over quickly? 

Or is biotech just in a much better place than it was a year or two ago, and so better able to weather the storm? 

Only time will tell. 

Watch this week’s hot topic below!