Invesco Perpetual fund manager Neil Woodford reckons that the pharmaceutical industry represents a once-in-a-decade opportunity. Woodford, one of the UK's best-known fund managers, tells Money Marketing magazine that the drug sector is "being given away by the stockmarket".
Woodford targets high-yielding sectors, such as utilities, for his income-driven investment funds and is known for his outspoken views on how these sectors are run and regulated. This time, however, his ire is directed towards fellow investors.
He feels they are underestimating the impact of "big pharma's" massive investment in research and development. Highlighting AstraZeneca he said: "Analysts are assuming [the company] will spend $50bn in 10 years on the pipeline and get nothing back."
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Woodford has already invested around 25% of the £17bn he manages into the sector and says he "has never seen valuations like this". Indeed, he reckons pharma is as attractive as another of his other favoured sectors tobacco was "25 years ago", since when the sector has delivered total shareholder returns of more than 9,000%.
But investors should move fast. "Pharmaceuticals is a very strong and powerful industry I do not think the market will ignore valuations for very much longer."
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