Activist Investors Target $30 Billion Tied Up in Biotech Stocks

Every so often, activist investors swarm around underperforming companies in a certain industry and pressure them to change strategy. Right now, it’s biotech startups that are flush with cash but still years from successful drug approvals that are in the crosshairs.

Investors are going after what they see as a mismatch in the market: About one in every six companies in the Nasdaq Biotechnology Index is trading below its cash holdings, data compiled by Bloomberg show.

With tariffs looming, rapid turnover at top regulators and funds being drained from public health initiatives, some activists want early stage developers to cut ...