The catastrophic coronavirus outbreak has led to a reappraisal of the biotechnology sector, even if viable treatments and vaccines seem far off.
Eli Casdin, founder and chief investment officer of Casdin Capital, a New York–based hedge fund specializing in life-sciences investments, considers life sciences, including biotech, the biggest growth story of the next decade, Barron's said.
“A lot of value has been taken out of the sector,” Casdin says. “Investors should recognize that an industry with a lot of growth ahead isn’t going to sustain disruption in the same way that much of the legacy economy will. And companies with strong balance sheets and management teams will carry the day.”
Here are biotech stocks he is optimistic about:
He said he is most hopeful about Gilead Sciences ’ (GILD) Remdesivir, which was developed to treat Ebola and Marburg. It is being adapted as a treatment for Covid.
He is also interested in Blueprint Medicines (BPMC), a long-term holding. Blueprint is developing targeted medicines for rare, genetically driven cancers. It will have three products on the market in the next 18 months. It raised money before Covid-19 hit, so it is well capitalized.
Invitae (NVTA) provides genetic testing for children with developmental disorders. "The company isn’t going to go out of business. It made a series of acquisitions in the past year that enable the practice of virtual medicine, so it was prepared, in a sense, for what is happening now," he said.
He also like stocks in the cell-therapy space; bluebird bio (BLUE) a leader in targeted cell therapy, has products approved or about to be approved. Fate Therapeutics (FATE) and Crispr Therapeutics (CRSP) are other cell-therapy companies he likes. "They are well financed," he said.
Meanwhile, U.S. drugmakers Eli Lilly and Co and Bristol Myers Squibb said they are delaying the start of new clinical trials in part to free up doctors and healthcare facilities to deal with the surge in patients infected with the new coronavirus.
Lilly and Bristol are the biggest drugmakers yet to announce clinical trial delays in the face of the pandemic after several small biotech companies said that they would be pulling back on drug studies, Reuters recently said.
The moves are not related to clinical trials testing drugs or vaccines that could be used to treat or prevent COVID-19, the respiratory illness caused by the virus.
The U.S. Food and Drug Administration last week urged switching to virtual patient visits instead of in-person monitoring when conducting clinical studies as it anticipated the outbreak would disrupt them.
Delaying clinical trials could hurt future revenue for pharmaceutical companies as it lengthens the time it takes for drugs to receive approval and reach the market. It could also hurt patients by limiting their access to experimental treatments being studied.
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