67 WALL STREET, New York - May 16, 2013 - The Wall Street Transcript has just published its Investing in Health Care 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 highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Health Care - Electronic Health Record Adoption - Biotechnology and Pharmaceutical Investing - Biotechnology and Pharmaceuticals - Biotechnology and Pharmaceutical Companies Valuation - Platform Interoperability and Data Analytics - HITECH Act Incentives - Affordable Care Act
Companies include: Dendreon Corp. (DNDN), Pharmacyclics Inc. (PCYC), Johnson & Johnson (JNJ), Celgene Corporation (CELG), Biogen Idec Inc. (BIIB), Pfizer Inc. (PFE), Merck & Co. Inc. (MRK) and many more.
In the following excerpt from the Investing in Health Care Report, an experienced portfolio manager discusses his asset allocation philosophy for investors:
TWST: Biotechs and pharmaceuticals are your biggest allocations by subsectors. Is the interest in pharmaceuticals a function of a theme or a matter of where you are finding good values and returns?
Dr. Kuruvilla: Yes, absolutely. It's driven by where we believe there is a disconnect between the future prospects of drug candidates versus where the share price is trading currently. We try to find where these disconnects are. Most general investors are not very good at forecasting returns, at forecasting peak sales.
It's just a whole world unto itself, and it's a world that, unless you've been in it for a while, unless you have experience, it's not an easy skill to pick up. For those who have it, then it's something where there is a value that can be had if one has the ability of due diligence and then wait for the market to realize that.
Sometimes it takes a while. There are times when it will take one to two years before the thesis plays out. We were big investors - in fact, I think it was our biggest position for a while - in a company called Pharmacyclics (PCYC) when few had even heard of the company. We bought the company in early 2011.
I used to see leukemia and lymphoma patients. Pharmacyclics presented clinical trial data in these patients at ASH, the American Society for Hematology meeting, and it took a long time for the market to realize the value, but then once it did, we had an 800% move up in about a year. That's the kind of thing that I'm convinced most market participants, in that lag period, have no idea how to analyze.
Now, once it starts running up, you have all kinds of people who will jump onto it - trend followers - and eventually, the information becomes more widely disseminated. But that arbitrage opportunity, if you will, is the ability to do the diligence...
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.