Biotech stocks are amid a multiyear slump. While it would be easy to lay the blame squarely on the Federal Reserve's dramatic rate hikes, that's not the whole story. Far from it. In reality, many biotechs brought this situation upon themselves.

During the previous bull market, scores of preclinical and early-stage biotechs went public without having much to offer besides hype. Many of these companies also lacked a clear business strategy, which doomed them once the Fed ended its highly questionable experiment with near-zero interest rates.

Predictably, the industry has seen a wave of bankruptcies and dissolutions in 2023. But that's not a bad thing. In fact, several developmental biotechs who got dragged down by the undertow (but still managed to survive) now screen as incredible buys for investors with a five to 10-year outlook.

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Source Fool.com