marketwatch.com
By Steve Johnson, FTMarketWatch
Kate Bingham, manager of International Biotech, has come out fighting in recent weeks, though.
So far this month, Bingham has invested £5.3 million in the newly merged operations of Microcide Pharmaceuticals (MCDE: news, chart, profile) and Althexis; sunk £3.5 million into privately held EyeTech Pharmaceuticals; and pumped a further £3.5 million into Discovery Therapeutics, another private U.S. outfit.
On Friday she invested a further £1.4 million in Aradigm Corporation (ARDM: news, chart, profile), which is developing aerosol-based drug delivery alternatives to traditional injections.
Bingham likens this buying spree to waiting for a bus ("they all come along at the same time"). Nevertheless, she says she is "pretty excited about the sector" and is upbeat for its prospects.
"The market got overheated last year. The sequencing of the human genome led people to believe there would be a silver bullet cure for everything, but it was just a template from which to work.
"Historically it is a very volatile market, it gets hyped up quite easily. And an awful lot of companies came to the market and used up all the potential supply of capital there was.
"But it is a pretty mature industry, it is robust against economic cycles, it is string and will remain strong.
"Next year it will start ticking up again. Historically, once you have had a big over-hyping of the market it always takes time to recover. But it has been a wonderful play for long-term investors."
Top picks
Despite the rash of purchases of private stock, some three-quarters of International Biotech's portfolio is in publicly quoted stocks. Some of Bingham's favourite plays are:
* Corvas International (CVAS: news, chart, profile), the largest shareholding at 8.6 percent of the portfolio. Its shares plummeted in July when the U.S. Food and Drug Administration asked for further testing of RNAPc2, used for the prevention of deep vein thrombosis and pulmonary embolism. "The product is being delayed because of the clinical trial design, rather than any issues of safety," says Bingham. "It is undervalued."
* OSI Pharmaceuticals (OSIP: news, chart, profile), which specialises in cancer treatments. "It has a broad platform for oncology," she says.
* AnorMED (CA:AOM: news, chart, profile), a Canadian company which researches and licenses metal-based therapeutic products. It has an attractive pipeline, with its latest product licensed to Shire Pharmaceuticals (UK:SHP: news, chart, profile).
* Onyx Pharmaceuticals (ONXX: news, chart, profile), which specialises in anti-cancer treatments.
* Targeted Genetics (TGEN: news, chart, profile), a Seattle gene therapy company that is claiming "promising" results from pre-clinical studies into a form of vaccination against Aids....
...Bingham's company, Schroder Ventures Life Sciences (SVLS), took over the management of International Biotech from Rothschild Asset Management in November 2000.
SVLS is the specialist arm of Schroder Ventures, which has been investing in life sciences companies since 1981, and established Shire Pharmaceuticals back in 1987.
SVLS's roots are anchored in private equity, and it aims to invest for the long run and help companies grow, often with its own representatives on their boards.
Bingham herself has an Oxbridge biochemistry degree and has sat on the board of seven companies... |
