Three biotech stocks on the cutting edge of medicine

Investors are only now recognising the vast potential of biotech stocks. Here. Professional investor Dr Daniel Koller of BB Biotech AG picks three of his favourites.

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.

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.

Recommended

Ensign Group: profiting from US private care
Trading

Ensign Group: profiting from US private care

Nursing and care-home specialist Ensign Group should thrive as Americans age. Matthew Partridge picks the best way to play it.
28 Sep 2021
Invest in a promising new chapter at RIT Capital Partners
Investment trusts

Invest in a promising new chapter at RIT Capital Partners

The long-standing chairman of the RIT Capital Partners investment trust stepped down in 2019, but the new team are doing very well, says Max King.
27 Sep 2021
How to profit from India’s high-tech recovery
Share tips

How to profit from India’s high-tech recovery

Professional investor David Cornell of the India Capital Growth Fund, selects three of his favourite Indian stocks to buy now.
27 Sep 2021
University spin-outs: where to find companies involved in cutting-edge science
Share tips

University spin-outs: where to find companies involved in cutting-edge science

Universities are innovation incubators and often launch businesses involved in fast-growing fields ranging from biotechnology to artificial intelligen…
24 Sep 2021

Most Popular

A nightmare 1970s scenario for investors is edging closer
Investment strategy

A nightmare 1970s scenario for investors is edging closer

Inflation need not be a worry unless it is driven by labour market shortages. Unfortunately, writes macroeconomist Philip Pilkington, that’s exactly w…
17 Sep 2021
What really causes inflation? Here’s what prices since 1970 tell us
Inflation

What really causes inflation? Here’s what prices since 1970 tell us

As UK inflation hits 3.2%, Dominic Frisby compares the cost of living 50 years ago with that of today, and explains how debt drives prices higher.
15 Sep 2021
The times may be changing, but don’t change how you invest
Small cap stocks

The times may be changing, but don’t change how you invest

We are living in strange times. But the basics of investing remain the same: buy fairly-priced stocks that can provide an income. And there are few be…
13 Sep 2021