Tax Reform Takes a Bite Out of Biotech Stocks

Healthcare companies will largely benefit from tax reform that lowers the statutory business tax rate to 20% from 35%, but those in research-intensive sectors such as biotechnology could end up with an unpleasant surprise at tax time. That's because Congress is considering eliminating the orphan drug tax credit and neutering the research tax credit. Could these changes slam the brakes on new drug discovery?

In this episode of The Motley Fool's Industry Focus: Healthcare, analyst Michael Douglass and contributor Todd Campbell explain how changes to tax credits may make the GOP tax bill a bitter pill for the biotechnology industry to swallow. They also update investors on CVS Health's (NYSE: CVS) planned acquisition of Aetna (NYSE: AET), and discuss how Apple (NASDAQ: AAPL) wants to use its Apple Watch to spot heart attacks and strokes before they happen.

A full transcript follows the video.

Source: Fool.com