Perspectives Blog

Specialty pharmaceuticals – The fastest growing category of healthcare spending

Harlan Sonderling, CFA, Senior Healthcare Analyst | January 27, 2014

…pace of change and disruptive therapeutic advances create significant opportunities across healthcare delivery Pharmaceuticals are central to the effort to improve medical outcomes and control medical costs. Recent patent expiries of “blockbuster” pills (small molecules) such as Lipitor, Plavix, Singulair and Zyprexa highlight the industry’s ongoing reorientation toward development and marketing of specialty pharmaceuticals (large molecules). T…

M&A in healthcare – Out with the old, in with the new?

Harlan Sonderling, CFA, Senior Healthcare Analyst | March 31, 2014

…nd pharmaceutical distribution, though none with the tax inversion strategies prominent in specialty and generic pharmaceuticals. Nothing above is boasting of our recent investment success in deal-driven specialty and generic pharmaceuticals (or other healthcare subsector) investments, nor to bemoan our lost opportunities in successes others have enjoyed. We do not suggest acquisitive companies and their stocks face imminent disaster if today’s o…

Antibiotic resistance – What it means for drug manufacturers, hospitals and diagnostic companies

Columbia Management, Investment Team | May 12, 2014

Overuse of antibiotics has led to new classes of “super bugs” that are resistant to current or traditional antibiotic treatments. Legislative and economic incentives are driving innovation and adoption of new technologies in the antibiotic resistance category across the investable healthcare spectrum. We anticipate increased new drug development and improvements in the identification and treatment of bugs and “super bugs.” By Aaron Reames, Wal…

Inversions and the growing scrutiny of corporate tax avoidance

Walter Colsman, Senior Equity Analyst | September 29, 2014

While inversions are not new, the pace of inversions has rapidly increased in the last few years. We believe the debate over tax policy and perceived corporate tax avoidance will only grow from here. Investors should be cautious about companies that have taken aggressive tax stances. U.S. corporate tax rates are among the world’s highest (Exhibit 1) and current tax code calls for the taxation of all profits earned by U.S. companies, including…

Death, taxes and Medicaid expansion

Harlan Sonderling, CFA, Senior Healthcare Analyst | September 8, 2014

Almost as certain as death and taxes is Medicaid expansion under ACA and the move by states toward Medicaid managed care and away from traditional fee-for-service. Medicaid managed care enrollment will expand as states transition beneficiaries from fee-for-service coverage to managed care and the “opt-in” states broaden eligibility. Medicaid coverage expansion will be a source of accelerating revenue and earnings within the managed care industr…

India’s new government fires investor enthusiasm

Natasha Ebtehadj, Fund Manager, Threadneedle International Limited | September 8, 2014

The landslide victory of the pro-business Bharatiya Janata Party (BJP) has transformed investor sentiment towards India. As the new government puts its stamp on policy, it will create investment opportunities not only in the domestic economy but also in sectors exposed to government-led reform. We believe the new government could enact much needed reforms to stimulate investment and unlock India’s economic potential. India’s economy has been w…

Predicting new drug sales is more art than science

Harlan Sonderling, CFA, Senior Healthcare Analyst | April 14, 2014

Predicting sales of new medicines is highly inaccurate and subject to significant and often costly errors. While investment analysts can draw on research tools and experience, history suggests new drug forecasting will remain more art than science. Despite the high level of uncertainty and variability in new drug forecasts, the innovative medicine industry is alive and well. Predicting sales of new medicines is highly inaccurate and subject to…