Each week, aprofessional investor tells us where he'd put his money. This week: Dr Daniel Koller of BB Biotech AG highlights three favourites.
Health is the key to a long and happy life. The biotechnology sector plays a crucial role in providing people with the means to recover from disease and remain as robust as possible and investors are only beginning to recognise its vast potential. The sector has encountered some short-term turbulence, however. The Nasdaq Biotechnology index (NBI) enjoyed a stellar first quarter of 2019 fuelled by mergers-and-acquisitions (M&A) activity, but it has since declined by 2%.
The political backdrop has unnerved investors. In the US the pressure to lower drug prices is growing. Healthcare costs and the cost of medicine have taken centre-stage in the Democratic Party's presidential primaries. The Trump administration recently retreated from a plan to lower prescription-drug charges, but has also threatened to use international drug prices to establish ceilings on what the health system will pay for various treatments.
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An auspicious outlook
The key innovators in the sector
Ionis Pharmaceuticals (Nasdaq: IONS)
Incyte (Nasdaq: INCY) primarily focuses on oncology (cancer treatment). The company has assembled a renowned team of drug discovery and development scientists focused on targeted oncology, which enables anti-tumour drugs to attack the right cells. Its main drug, Jakafi, treats rare types of blood cancer. Another intriguing outfit is Neurocrine Biosciences (Nasdaq: NBIX), which focuses on neurological and hormone-related disorders. Neurocrine has successfully launched the drugs Ingrezza for the treatment of mental-health disorders and Orilissa for gynaecological problems.
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.
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