Biotech Sector Under the Microscope

that going on. So really smart for us to take a deeper look into this group. You're really excited to speak to Debra net Shirt Health Sciences, portfolio manager at the registered investment advisor Jennison Associates. It's got a hundred and sixty four billion dollars in assets under management. Debra joins us on the phone from New York City. Good

to have you with us this afternoon. So before we we start about talking about what's happening this year, let's just think back to the last couple of years, because I think for a lot of investors, biotech came on their radar with talking about you know, companies like Derna developing an m R and a vaccine, and perhaps you know, a different group of investors now paying attention to a group of companies that has been historically volatile but has

also offered potentially a lot of promise. Yeah, I think that's right. I think that when you look at all of the different UM investors that came into the market during COVID, they looked at the madernas and the biontics and the Nova vaxes and all of the rapid development of the COVID nineteen vaccines and started to think that there was going to be an opportunity to see accelerated

development UM like this in other categories. And the problem with UM, you know, with that is is all of these vaccines were really developed under an emergency use authorization and that was a very distinct pathway used at the FDA, and and development takes time, and I don't think that the pathway that the FDA used and the rapid development we saw in COVID nineteen vaccines is really going to be relevant. And so some of these investors really expected

us to see follow on with with UM. COVID nineteen paired with RSC, paired with flu and really start to be able to see these vaccines kind of coming out a really rapid rate and UM and some of the reality of the kind of going back to the normal drug development timelines, and then just the reality of the you know, the bulliest of patient population that these vaccines were serving kind of brought people back to reality. You know.

I have to say I always love UM the different conferences, whether it's ASCO which looks you know, into cancer, because you always get a lot of news out of it in terms of drug development or what companies are working on what So what might kind of be some really innovation UM or innovation that we're going to get out of the biotech sector this year that investors should maybe take note of. Well, there's I would say, there there's there's always a lot of innovation, and there's a lot

of UM. There's a lot of data that comes out at all the of all of the conferences, So you know, there's We're we're starting to see a lot of things UM you know coming out a lot of a lot of innovation is actually interestingly happening in the larger cap companies and it's the first time that we've we've seen the larger cap companies start to UM enter new product cycles, have a resurgence and growth and and have the ability to to really positively impact their revenue and EPs profile

over the next couple of years by some of these big markets. Obviously, we've seen UM a huge increase in the use of the g lp ones that are approved for diabetes but are also UM in certain instances, UM approved for obesity and and soon to hopefully be approved for obesity for for other companies. And you're seeing a huge use of this group of drugs, and I think you're gonna start to see a lot of additional indications coming out of that. UM. We're starting to see some UM.

You know, we have gene therapies that have now been approved better on the market. So it's going to be really interesting to see how the business models for these single very expensive yet UM. You know, sometimes curative UM are really gonna be able to be Now debor forgive me for interrupting, And I know your portfolio manage, and I don't know how deep you can go for us. I know our audience always loves whether it's sectors specifically or talking some names like are there, And again I

don't know how deep you can go. Can you throw out some names to us that you think, Wow, these are definitely on my radar, Or if I'm looking to commit some new money for investors, that's what I'm going to think about. I would love to do that, but unfortunately I would have had to UM, I would have had to have things cleared before doing that. On today's program, No problem at all, Deborah. We needed to ask, Hey, Um, one thing that I really want to hear from you is,

obviously the investment question is is really fascinating. But at the same time, your cover a space that is just really exciting from a human perspective. We all know people who have been affected by just terrible diseases, and I wonder, given what you cover and how much research you do into these companies, what just excites you about living in a world where we could soon, you know, be living longer and saying goodbye to some diseases that previously were

death sentences. I mean, I think exactly that I think you know. I always I always say that it's a gift to be able to get what I do, because if you have endless intellectual curiosity like I do, UM, you can't you really are able to stay on the forefront of really looking at the at the diseases and UM and all of the new innovative treatments that are

coming out and UM. You know. And I also view my job as a shareholder of companies to be helping companies who are going at this for the first time and helping them to Okay, so fall into paint a picture for us, you know, ten fifteen years from now when it comes to some of these moon shots. I mean, do we say goodbye to to chemotherapy and and instead we can talk about gene therapy or I'm taking well, I mean, look, I you know, I hope that in ten years we are saying goodbye to to chemotherapy or

we're finding a way. We've seen innovation with chemotherapy through UM drugs called antibody drug conjugates that take the chemotherapy and develop it to only the cells that need it, as opposed to a blading all fills, and so that has allowed cancer patients to already receive chemotherapy in a way that it's not so toxic. UM. So hopefully we're either you know, continuing down that and you know, there

could always be a use for chemotherapy. But hopefully in a decade we are we're really changing the curve on personalized medicine where we're really starting to understand and individual cancer in the individual person and being able to target that cancer in a super specific way. UM and you know, and curing cancer individually, one person at a time. And

we know that you're you're um. You know. Part of the managers for the PGM, Jennison Health Science has fun And I just want to because our audience cares about things like this. Three years, if I look at the average annual performance according to Bloomberg Data up about eleven, putting it in the ninety percentile UM and United Healthy, like literally Mark, these are some names that are in it, Humana. I mean, as you say, there's a lot of large cap names. While we often think of biotech, it's kind

of smaller startups. It really is a lot of these bigger cap names that are very involved in setting the trends of what's to come when it comes to healthcare. It is the larger companies are definitely the ones who are saying the trends in a in a way, UM and the innovation happens in both camps a lot of this. A lot of the innovation that is currently in the hands of Eli Lily or a Murk or or you name the large cap company came from a small cap biotech.

So it's not to say that it's the innovation starts at the larger or the small. It kind of happens across the spectrum. But you know, the super innovative companies that develop drugs that are going to be incredibly efficacious, typically we'll wind up becoming part of a larger company over time. So there's an ecosystem there that that has worked, you know, pretty well over time. And listen, do you really care about what the Fed does or what inflation does?

And just got about thirty seconds. Does that really shape your investment decisions? I mean it has to around the edges. I think all of us have had to have had to become armchair macro um macro experts here and there um. But at the end of the day, my colleagues and I Agena been really trying to focus on the fundamentals. All right, really appreciate it, Deborah and uh look forward to next time and maybe digging a little bit deeper

into your portfolio holdings. A Debora net Church. She is health Sciences portfolio man and your Jennison Associates a