ASX tech shares have been rocketing in 2020 thanks to the likes of Afterpay Ltd (ASX: APT). The Afterpay share price has surged 144.9% higher but I think the tide is starting to turn. In my mind, biotech shares like Polynovo Ltd (ASX: PNV) are shaping up as the hot new buys in the market.
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Why ASX biotech shares can outperform in 2020
The coronavirus pandemic has thrown a real spanner in the works. Dividends have been slashed, forcing many investors to look for growth instead.
That has seen tech shares like Afterpay continue to surge higher. Software-as-a-service (SaaS) businesses have managed to maintain revenue and keep costs low in 2020.
However, I think ASX biotech shares like Polynovo are looking like the next big thing.
To be clear, the fact that Polynovo has strong growth prospects is not a new idea. The Polynovo share price is up 21.0% this year alone and has a market capitalisation of $1.5 billion.
But COVID-19 has shown that the biotechnology sector has a lot of innovation ahead of it with some seriously strong research and development prospects.
The reason I like Polynovo is because of its strong track record and defined future strategy. The group's NovoSorb BTM product has seen resounding success across the world in the dermal scaffolding market.
Now Polynovo is seeking to reach out even further. At the top of the list are the lucrative hernia and breast augmentation markets which could see Polynovo earnings soar.
It's not just Polynovo that I like amongst the ASX biotech shares. I'm quietly bullish on the Mesoblast limited (ASX: MSB) share price after its recent success with the United States Oncologic Drugs Advisory Committee approving its remestemcel-L treatment for acute graft versus host disease.
Foolish takeaway
There's no doubt that ASX tech shares like Afterpay have outperformed in 2020. However, I think it's worth avoiding the trap of chasing gains that may have already gone and not buying in at the absolute top of the market.
ASX biotech shares could be on the rise with growing addressable markets and a solid track record. That's why I think the Polynovo share price could be good value at $2.25 per share.
