Two potential items of interest, both available on the LW...

Two potential items of interest, both available on the LW website.

On 5 August, in an article titled The sector recovery that is just getting started and what to watch , Andy Acker, Portfolio Manager on the Health Care and Biotech Teams at Janus Henderson Investors notes that biotech is emerging from one of its worst bear markets on record and is watching  for the first Fed rate drop

According to industry analysis, since 1995, the biotech sector has typically outperformed during rate-cutting cycles, delivering gains seven out of eight times in the six months after the Fed’s first rate drop. And over the following 12 months, the sector has outperformed the S&P 500 Index by an average of 16%.

Today there is an article by Melissa Benson from Wilsons Advisory, titled Where to find value opportunities in Australian healthcare and 3 stocks to watch.

Benson nominates NEU as one of two “key value opportunities” to have presented in recent months.

She mentions not only the imminent catalyst of Phase 2 readout for Angelman’s syndrome, but also the market’s short-term focus and lack of longer-term vision which has caused NEU to trade 30% or more below what she sees as an appropriately risked valuation

….the market is totally focused on existing revenue streams (drugs on market) and if they may be slightly downgraded in the near term (which has an immaterial impact on future earnings) and are missing the far bigger pipeline opportunities (5-10x) that in each case open up markets that are multiples of their existing revenue streams. Small downgrades to sales of either DAYBUE (in case of NEU) or SCENESSE (in case of CUV) become immaterial to the investment case for each stock.