Dave,
One prominent money manager stated that he who overturns the most rocks wins (Peter Lynch).
Its not a hedge, the UK and US biotech sectors are highly correlated-the US biotech sector dumps, UK will follow. Like you, I am trying to invest as wisely as possible, focusing on good companies with good science, great prospects and above all favorable share price. One important point is that I do believe it important to focus on those developing drugs in the U.S.-as it is the most highly profitable drug market in the world.
Yes, you are absolutely right, the US biotech sector is loaded with nice companies with outstanding prospects, one could easily do well while exclusively devoting their efforts to them. From time to time my independent research comes across nice ideas that are foreign based, such as Chiroscience and Xenova. It would be foolish not to at least investigate them as possible investments, as at the least, they may be competitors of US biotechs that I follow and prove to be very profitable investments- as is the whole point of investing in any stock regardless of their locale.
In reviewing Chiroscience-close to unknown here, I found out they are a very nice combination a few US based biotechs I am endeared to. They have a great chiral program w/outstanding targets ala SEPR. They also appear to have a very nice structure based drug design program ala VRTX and AGPH. I decided to purchase shares and despite their London listing the purchase was simple. Folowing them day to day will be more difficult but perhaps I need one that I am not glued to on an hour to hour basis. The shares adjusted for the currency sell in the $5 range-$500M MV. I do expect ultimately they will list ADR's.
Xenova is also a biotech to watch. They have ADR's as well as a CA based subsidiary called Metaxen, which is focused on natural based CC libraries. Their MV is under $100M (I believe appr $75M) and the share prices is in the $3's which may entice you. From what I have heard the science is outstanding. I need to examine them further.
Dave, in short it may be fruitful to expand the bounds of your research a little bit. There are some very nice foreign based drug companies that have very good LT prospects, I am not talking about following 160 different biotechs, just from time to time a new one may cross your screen that may be worthwhile to follow and possibly invest in. ELN, Affymax, Cortecs, British Biotech, Teva (a personal 10 bagger I still hold) just to name a few that have been great stocks. |
