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Picks and Pans – The Buy-Side View for 2012

February 14, 2012
What’s the forecast for biotech in 2012? Do investors think it is a good time to invest in biotechnology? Are they interested in taking on early stage companies?

At the BIO CEO & Investor Conference opening plenary, the BIO Industry Analysis team released results from their Investor Perception Study and, afterwards, a panel of portfolio managers and senior buy-side analysts fielded a range of question about the challenges and opportunities facing the industry. David Gluckman, M.D., managing director and co-head of North American Life Sciences, moderated the panel that included:

  • Alexander J. Denner, PhD, (former) Managing Director, Icahn Associates

  • Rajiv Kaul, Portfolio Manager, Fidelity Select Biotechnology Portfolio, Fidelity

  • Greg Martinez, Portfolio Manager, Diamondback Capital Management LLC

  • Deepa R. Pakianathan, PhD, General Partner, Delphi Ventures

“Our survey … suggests that investors still believe that it is a good time to invest in biotechnology,” Alan Eisenberg, executive vice president of emerging companies and business development, explained.

BIO’s survey found that over 55 percent of investors believe it is a good time to invest.


Rajiv Kaul, portfolio manager of Fidelity Select Biotechnology, agreed with the survey results and he explained why during the panel session.

“There are a couple of things … which make me very optimistic about the future of this industry,” Kaul said. “One of the things that stands out to me is … the ability to develop more targeted therapies and the cost of sequencing the human genome has gone down from $2 million to $2,000 in the last 5 years.”

The other major take-away from the Investor Perception Study, Eisenberg explained, is that investors are more focused on early stage companies and they’re willing to take greater risk on less liquid companies.

“Investors, on a relative basis this year, are more focused on early stage companies than later. And, this sentiment is also born out by the increase in percentage of investors who indicate that they are willing to invest in small market cap biotechs.”


View the whole PowerPoint presentation: