Four promising biotech stocks to buy now

The recent correction in biotech stocks was overdone, says professional investor Dr Daniel Koller. Here, he picks four biotech companies to buy now.

Each week, a professional investor tells MoneyWeek where he'd put his money now. This week: Dr Daniel Koller, head of the BB Biotech management team.

Investors have been nervous over bubbly biotechnology stocks, but the recent market correction was overdone. Current stock prices offer attractive entry points, as the fundamentals of the business remain unchanged and strong. Forty-one new medicines were brought to market in 2014, the highest number since the record year of 1996, and most of them came from biotech laboratories. Thirty to forty new products a year are expected to be approved in the US and Europe between now and 2018, with effort concentrated on diseases that occur with advancing age such as cancer, arthritis and Alzheimer's and on illnesses such as hepatitis, multiple sclerosis or rare genetic disorders for which there are no or inadequate treatments. Of all the branches of health, investors can expect biotechnology to have the highest growth in profits in the coming years. Stock valuations reflect this.

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Dr Daniel Koller is head of BB Biotech at Bellevue Asset Management and resides in Zurich, Switzerland. He occasionally writes for MoneyWeek online and print and gives his share tips.