Global Healthcare Companies Investor 100% Overweighted To Biotech As Wave Of Acquisitions By Large Pharma Picks Up Pace

• On 10:35 am EDT, Friday October 23, 2009

67 WALL STREET, New York - October 23, 2009 - The Wall Street Transcript has just published its Biotechnology Report offering a timely review of the sector to serious investors and industry executives. This 70 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Trend Toward Orphan Disease Drug Development - Generic Drug Competition - Current Length Of FDA Approval Process - Ownership Ego Preventing Shareholder Returns - IPO And Secondary Offering Window Opening - Big Pharma R&D Pipeline - Decreased Clinical Development Risk - Impact Of Health Care Reform - Convergence Of Large-Cap Biotech And Pharmaceutical Companies - Easier Credit For Small Cap Biotech Companies - Developments In Cancer Chemotherapeutics - Gene Delivery Technology

Companies include: ADVENTRX (ANX); Abbott Labs (ABT); Advaxis (ADVX); Amedisys (AMED); Amgen (AMGN); Amylin Pharmaceuticals (AMLN); Antares Pharma (AIS); BioDelivery Sciences (BDSI); Biogen Idec (BIIB); Biomarin (BMRN); Boston Scientific (BSX); Bristol Myers (BMY); CVS Caremark (CVS); Celgene (CELG); Cerner (CRN); Cerus (CERS); Coke (KO); CombiMatrix (CBMX); Coventry Health Care (CVH); DARA (DARA); Eisai (ESALY); Eli Lilly (LLY); GenVec (GNVC); Gilead (GILD); GlaxoSmithKline (GSK); Health Management Associates (HMA); Human Genome Sciences (HGSI); Inspire Pharmaceuticals (ISPH); Intellect Neurosciences (ILNS.OB); InterMune (ITMN); International Stem Cell (ISCO.OB); Javelin Pharmaceuticals (JAV); Johnson & Johnson (JNJ); Keryx Biopharmaceuticals (KERX); Kraft (KFT); MAP Pharmaceuticals (MAPP); Medco (MHS); Merck (MRK); Merit Medical (MMSI); Novartis (NVS); Novelos (NVLT.OB); Novo Nordisk (NVO); Nutrisystem (NTRI); OSI Pharmaceutical (OSIP); Orexigen (OREX); Pepsi (PEP); Pfizer (PFE); Rite Aid (RAD); Schering-Plough (SGP); Takeda (TKPHF); Teva Pharmaceuticals (TEVA); Viropro (VPRO.PK); Walgreens (WAG); Wyeth (WYE); XOMA (XOMA); ZIOPHARM (ZIOP).

In the following brief excerpt from the just one of the 17 in depth interviews in the 70 page report, a Buy Side industry expert analyst discusses the outlook for the sector and for investors.

Serge Depatie is a vice president, portfolio manager and security analyst at Natcan Investment Management Inc., which he joined in 2003. Mr. Depatie began his investment career in 1999. From 1994 to 1999, he acted as Medical Products Development Director of CQI-Biomed and Marketing and Sales Vice President of Biosyntech. Before arriving at Natcan, he also worked for Hampton Securities and Jitney Group as Life Science Analyst. Mr. Depatie obtained an MBA degree from Concordia University and a BS degree in Engineering from McGill University.

TWST: What about the large-cap pharmaceuticals and biotech joint ventures and partnerships with biotech firms? Is that going to continue?

Mr. Depatie: Yes, we saw Pfizer (PFE) buying Wyeth (WYE) and Merck (MRK) buying Schering-Plough (SGP). These are synergies that allow growth for them. I think it's going to continue, and Pfizer has basically softened their patent cliff. They were seeing large patent cliffs on their Lipitor franchise and by buying Wyeth they basically took out the patent cliff on that. So now instead of losing 50% of their sales, they're going to only lose, I think, it's 15%. The company becomes much more attractive, because now it's easier to model new drugs that come in. We can put a growth rate on it and it's a very low valuation at this point. These companies become very attractive when the market has run strong I think, as value investors have really nowhere else to go at one point. That's why actually, in the short term, we have seen some good interest in the pharmaceutical sector. The mergers will definitely continue. As we saw lately, Abbott Labs (ABT) bought Solvay. Abbott is one of the better acquirers in the industry. We're seeing a lot of interest and expertise by pharma in vaccines right now. Everything in vaccines is being coveted and we're seeing large markets. These markets are going to grow in the mid-15% range and that's faster than typical drug markets.

TWST: What about the mergers and outlook activity? A lot of these companies have done badly during the market turmoil and do you see further consolidation in general across the board?

Mr. Depatie: I'm seeing probably a wave of biotech acquisitions, that's what I would see as we're seeing more confidence in product approval. Biotechs have been better on focusing on really describing their market opportunity on not trying to develop drugs for everyone, but being very focused on successfully launching into niche markets and getting premium prices for these drugs. I think the larger companies are getting more accustomed to that model and are probably going to invest more and more.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 70 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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