For the biotech traders/investors of this thread (who often wrestled with the valuation issue):
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Money Manager finds Amgen attractive in Wall Street Transcript Interview-HENRIETTA THEORELL is the Chief Investment Advisor for Health Care with SEB Investment Management
The Wall Street Transcript, 2/25/2002 9:25:00 AM
New York City, New York, Feb 25, 2002 (The Wall Street Transcript via COMTEX) -- Eight money managers examine portfolio management strategies in the latest issue of The Wall Street Transcript, available at (212/952-7433) or twst.com
TWST: What are the specific characteristics that you are looking for in biotech stocks?
Ms. Theorell: Of course, the product is very important: what is the size of the market for a particular drug and how many competing products are there in the market? So first of all, you have to look at whether or not it's an attractive product. If you are looking at the early stage biotech companies, it is very important to look at management: how much experience does the management have? Also, if you are looking at non-approved products, you also have the approval risk to consider. I prefer at least Phase II or Phase III data, because I think it is too risky to invest in the earlier stage. The odds for success are not very attractive, so I leave the really early stage companies to other investors. The SEB funds have a tilt toward later stage companies. It is also important to evaluate how diversified the company is, whether they have more than just one product in the pipeline. Also, when you look at clinical trials, it is preferable that companies conduct several parallel clinical trials so that they are hedging their bets somewhat - different dosing regimens, different indications, and so on. If one clinical trial fails, they might have another one that meets the end points so that they don't have to start over and be delayed for several years. There are many things to look at when investing in biotech.
TWST: What is the capitalization of your stocks in the biotech fund, generally?
Ms. Theorell: It can be quite small. This is a $25 million dollar fund, so the capitalization isn't really a constraint. But I do have many large caps, companies such as Amgen (Nasdaq:AMGN) and MedImmune (Nasdaq:MEDI). I think they are quite attractive right now. In the healthcare fund there are normally large cap stocks because I run into liquidity problems as well as constraints in terms of how much the fund is allowed to own of a certain company. But the biotech fund is not constrained by these factors as it is a lot smaller. The smallest company in the biotech fund right now is a Swedish company with a market cap of $47 million. That's very small.
TWST: Do you have an overlap of some biotech stocks in both your biotech fund and healthcare fund?
Ms. Theorell: Yes, there is a considerable overlap.
TWST: Could you tell us about some of those that you have in both funds, and the reasons why you were attracted to them?
Ms. Theorell: One that I have is Amgen, as I mentioned before. Amgen is, of course, a biotech company that most people know -- the largest in the world. The market wasn't very happy when they announced the acquisition of Immunex (Nasdaq:IMNX) late last year, and the stock fell back on the news. The acquisition was dilutive, and Amgen had earlier told investors, when they went through their acquisition criteria, that they wanted certain characteristics if they were to make an acquisition. One of those was that it was not dilutive, as the Immunex acquisition was. But now the stock has come down and the acquisition will increase the combined company's sales and profit growth from 2004 onward - and it will also make Amgen more diversified. Also, Amgen has had a stroke of luck recently with products receiving reimbursement and approval earlier than expected. So there was a combination of positive news and a reasonable valuation.
This special Investing Strategies Report includes:
1) Investing in Biotechnology - Kurt von Emster, Portfolio Manager at MPM Capital, LP, examines portfolio management strategies in this timely and deeply informative 6,000-word interview from The Wall Street Transcript.
2) Henrietta Theorell, Chief Investment Advisor at SEB Investment Management, examines portfolio management strategies in this timely and deeply informative 3,500-word interview from The Wall Street Transcript.
3) Seth Hieken, Principal at The Colony Group, Inc., examines portfolio management strategies in this timely and deeply informative 5,100-word interview from The Wall Street Transcript.
4) Tasso H. Coin, Jr. and Douglas G. Pugh, both Senior Vice President at Peregrine Capital Management, examine portfolio management strategies in this timely and deeply informative 5,500-word interview from The Wall Street Transcript.
5) Pierre G. Trinque, Chief Operating Officer at Riggs Investment Management, examines portfolio management strategies in this timely and deeply informative 4,600-word interview from The Wall Street Transcript.
6) Robert A. Schwartzkopf, Director of Small Cap Investments and Sandi L. Gleason, Senior Equity Analyst both respectively at Kayne Anderson Rudnick Investment Management, examine portfolio management strategies in this timely and deeply informative 4,300-word interview from The Wall Street Transcript.
This interview is a small excerpt from a comprehensive interview published in The Wall Street Transcript on 02/25/02.
Henrietta Theorell
CONTACT: The Wall Street Transcript Corporation
67 Wall Street, 16th floor, NY, NY 10005, USA
(212) 952 7433
(212) 668 9842
info@twst.com
Ibexx |
