For those who are looking into investing in the biopharmaceutical industry, 2010 will be a flourishing year for you. A great number of mergers and acquisitions are to be expected as waves of consolidation linger from last year's major restructuring (e.g. Pfizer-Wyeth, Merck-Schering Plough, Roche-Genentech). Big pharma, such as Genzyme, will have to rely on the innovation and agility of small biotech to replenish the product pipeline as profit-generating pills run out of patent protection. Pay extra attention to small biotech companies that can help large pharmaceutical corporations to not only expand their drug portfolio but also establish new grounds in emerging market (did I hear SMALL and INNOVATIVE?!?!). Set your screening parameters to include only those that are coming out of phase II and/or entering phase III trials to maximize your gain. Included in your filter should also be the lead technology being developed by the company. Given the leap in genomic science, companies with technologies associated with personalized medicine and its accompanying diagnostics will likely stand out from the crowd. Of course, don't forget the overarching impact that ObamaCare will create and how it will alter the landscape of pharmaceutical business (topic of further discussion later).
In summary, the healthcare sector will see strong growth in 2010 with the injection of fresh financings into pharmaceutical R & D and commercialization, and in the midst of deal-signing and handshaking, smaller-cap biotech stocks are personally favoured. Keep in mind: Identifying and investing in ripening technologies irrigated by streaming capital will warrant you to be a big winner at the start of this new decade!
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