Mr. Shenouda: I cover U.S. large-cap biotechnology as well as some mid- and small-cap names.
TWST: How do you define biotech?
Mr. Shenouda: The demarcation is getting grayer and grayer between these companies. Initially, it was companies that manufactured or developed protein therapeutics, but now you see that biotech companies are getting involved in small molecules, and small molecules were historically the domain of pharmaceutical companies as well as specialty pharma companies. Again, the demarcation is getting a lot vaguer. Now largely biotech companies, Amgen aside, Gilead aside too, are smaller than pharma companies and their growth trajectories are a bit higher. More specifically, their revenue and EPS growth trajectories are a bit higher.
TWST: So you believe we're going to have more and more overlap between these companies?
Mr. Shenouda: Exactly. In the biotech universe you have a lot of overlap in terms of the large caps. Now with small caps, these are development-stage organizations, largely without products on the market in various stages from preclinical to Phase III development. Some of them do have products on the market, but most don't. And the investment opportunity on the upside lies in development progress and hopefully one day getting one of these products to cross the line into commercialization.
Tickers included in this excerpt: AMGN, BIIB, CELG, ESALY, GILD, HGSI, TKPHF
For more information call (212) 952 7433. The Wall Street Transcript does not endorse any of the comments made by interviewees, and does not make stock recommendations.