Paradigm-Shifting Breakthroughs Boost Pharma Stocks: Citigroup Investment Global Head of Healthcare Research & Analysis Andrew Baum, M.D. Interviews with the Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - April 28, 2014 - The Wall Street Transcript has just published its Biotechnology and Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This special 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: Health Care - Biotechnology and Pharmaceuticals - Orphan Drug and Biologics Manufacturing - Oncology Drug Development - Orphan Drugs - FDA Approval Process - Biotechnology and Pharmaceutical Companies Valuation - Genetic and Cell Therapies

Companies include: GlaxoSmithKline plc (GSK), Bristol-Myers Squibb Co. (BMY), Novartis AG (NVS), Novo Nordisk A/S (NVO) and many others.

In the following excerpt from the Biotechnology and Pharmaceuticals Report, the head of Healthcare Research for Citigroup Investment discusses his outlook for the sector and details his top stock picks for investors:

TWST: It's been a good run for pharma stocks, especially the specialty and generics and those in the biopharma end of the spectrum. What do you see as some of the keys to that outperformance, particularly over the last year or so?

Dr. Baum: At least for the large-cap pharma names, the industry has gone from pricing in a negative terminal growth rate of as much as minus 5% to 0% over the space of the last 12 to 24 months. The biggest single driver of that is a change in the perception of R&D returns, driven by a couple of things: We've seen a much more pro-industry FDA, which is looking for ways to accelerate development of drugs with significant unmet medical needs. That's been coupled with some very significant, paradigm-shifting breakthroughs affecting substantial diseases.

Hepatitis C, obviously, remains a very important story. We're taking a chronic disease with major economic ramifications and turning it into one that's curable in eight weeks for the vast majority of patients. But more interestingly, just given the scope of the problem, I firmly believe we are on the cusp of beginning to transform stage 4 cancer from a terminal disease to one which is much more chronic in nature, with many patients having the possibility to reach a functional cure.

That has enormous ramifications, obviously, given that cancer affects one in four of us and is the second-largest cause of death in the Western world. That's a profound breakthrough.

The third point, which is separate from R&D, is the concerns about the sustainability of pricing for novel pharmaceuticals in the U.S. have significantly...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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