Grokking the biotech industry
Making sense of a historically volatile market in a post-COVID era
Relative to the 11 market sectors associated with the S&P 500, the biotech/healthcare industry can often be an opaque, difficult-to-understand arena that attracts hundreds of thousands of investment professionals from family offices, endowments, pensions, foundations, sovereign wealth funds, and other places looking to diversify portfolios and generate returns that are immune to external market forces. Biotech is and has historically always been the asset class least correlated with other markets, particularly the equity markets, which make it an attractive asset for many investors. A few of my contacts working in biotech hedge funds will sometimes refer to Wall St. folks trading biotech stocks as “tourists”. When asked why, they will answer that it’s simply because, despite their best intentions, Wall St. people generally don’t know what they’re doing in this complex sector (just like tourists vacationing to new places). In general, it’s often best to ignore the day-to-day volatility because the sector is replete with retail and other generalist investors — i.e., the “tourists”.
This email newsletter is designed to bring some semblance of clarity to a very challenging, dynamic and constantly evolving market sector, and contribute my own domain expertise (primarily in the CVRM disease arena) to help you grok the biotech industry and learn something new. It is designed to appeal to a broad audience interested in developing boutique biotech market insights, ranging from VC/private equity firms and hedge funds to big name Wall St. “tourists” and hobbyists alike.
Background
In general, it’s fair to say that biotech/healthcare will do fairly well compared to many other market areas in the next few years, as the entire world’s attention has become spotlighted on this industry due to COVID-19, and an entire generation of people (for whom biology once associated only with memories of their high school science teacher showing how to dissect a frog on lab day) now seeing the global impact of what can happen when biology goes wrong. As a faculty member at the University of Chicago, I am already seeing students who were once dead set on double-majoring in robotics and electrical engineering re-considering biology and computer science, etc. And soon a vaccine produced by biotechnology companies will bail us all out of the pandemic mess that we have found ourselves in. Such public spotlight on the biotechnology sector will inexorably lead to heightened market interest over many years/decades, which inspired me to start this newsletter to share some of my thoughts and personal experiences in the biotech space. About me:
I work in academia (currently, I'm on the faculty at University of Chicago and previously held a staff position at Stanford University where I served as an American Heart Association Postdoctoral Fellow and Research Associate in the VA Palo Alto Health Care System). During my free time outside of work, I keenly follow the biotech/healthcare markets (both public and private), especially within my primary area of expertise: cardiovascular/renal/metabolic disease drug discovery, therapeutics, diagnostics, and medical devices. Sometimes, I even give advice to a few pros, mostly in the biotech hedge fund arena. I live in Chicago, one of the capitals of the world in high finance. All that being said, I am not your financial advisor, and neither are any of my current (or future) posts. Use my writing as an educational tool, and nothing more. Opinions expressed are solely my own and do not express the views or opinions of my employer.
About us
Boutique Biotech is a high content low volume newsletter email digest reporting on unique biotech and healthcare market insights not often covered in mainstream media outlets (e.g., FierceBiotech, Endpoint News, GenomeWeb, BioPharmCatalyst, STAT News, Cowen, BioPharma Dive, Timmerman Report, etc.) — hence, the word “boutique”. The initial emphasis will be placed on distilling down news, views, and insights into the emerging public and private markets surrounding cardiovascular/renal/metabolic (CVRM) disease indications (including diabetes and obesity), which collectively constitute the #1 global killer. Over time, this newsletter will also expand into covering boutique insights not easily found in other therapeutic areas such as oncology/immunology, neurodegenerative disease, etc. Boutique Biotech will also periodically feature podcasts with key thought leaders in the biotech/healthcare space. Initial emphasis will be placed on the CVRM disease focus/area due to Dr. Khomtchouk’s expertise as well as sheer market size and projected compound annual growth rate in this sector:
In the metabolic disorder market alone, rising incidences of diabetes, obesity, and hypercholesterolemia are expected to drive the market growth.
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P.S. Not investment advice. Read the Liability/Disclaimer subsection to learn more.