The biotech sector is expected to continue to deliver innovation, top-line growth and manage to maintain a disciplined cost structure, allowing delivery of high single-digit or double-digit earnings growth, says Ravi Mehrotra, Ph.D, Head of Global Biotechnology Research at Credit Suisse.
“Given the macro environment, this is still a defensive sector to a certain extent. Therefore, in the current environment, I still think biotech will continue to garner significant interest,” Dr. Mehrotra said.
Dr. Mehrotra has an “outperform” rating on Biogen Idec (BIIB), which he says has been the strongest performer year to date in his coverage universe. He says Biogen’s BG-12, which has driven the company’s performance, may be a drug that changes the multiple-sclerosis therapeutic area, which is rare.
“While we see drugs which have changed the way people do business and have thus taken market share, we rarely see drugs which massively create a paradigm shift in their therapeutic area,” Dr. Mehrotra said.
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