Due to healthcare reform, the weak Euro and European austerity measures revenue expectations in bio-pharma companies should be reset 5% lower. The stocks have already reset 15% lower and have more than discounted this and have even discounted further cuts which may or may not occur. Valuations in the space were very low before this and are now ridiculously low.
As an example ex-cash Gilead trades at less than 4.5 times peak earnings. They should earn their stock price ex-cash in the next 5 years. Healthcare has always been a growth space that attracted growth investors. There is currently a transition going on in the shareholder base from growth to value. This transition should be accelerated by the share repurchases and consolidation in the space. I believe there will be no looking back once the transition is complete.