Replies to post #236172 on Biotech Values

[dewophile]

I'm leery of the market moving forward, and bios in particular in advance of the Jan special election since a democratic controlled senate poses more risks wrt drug pricing. There are some bios like RVNC (aesthetic), ENTA (Hep C tx is cheap), FGEN (Roxa likely cheaper on healthcare system than epo - even biosimilar) that have lower risk when it comes to this, and in general I think Biden is less apt to be aggressive on the drug pricing front (war on cancer) esp on the heels of a pandemic.
On the more boring front GSK and GILD are quite cheap from a valuation standpoint and pay a nice dividend
But I am happy to be more in cash right now personally
I would be curious to hear other's takes and ideas too

[DewDiligence]

Re: Stock picks

I'm looking for some ideas for the new year.

As you know, I’m bullish on RVNC and ENTA. RVNC will have strong buyout vig as soon as Daxi is approved for marketing. ENTA is cash-rich and has a decent chance to make a big score in RSV and/or HBV; the payoff could take a while, but there’s not much downside at the current valuation.

ABT, PFE, and BMY are solid defensive picks that offer “growth at a reasonable price” (a/k/a GARP).

ABT has already made serious money on COVID (#msg-159036972) and PFE stands to make a lot, but COVID business is just a sideshow for these companies. More important to PFE than COVID is the emerging market for second-generation pneumococcal vaccines, where I think PFE is favored to prevail against MRK (#msg-160021392).

BMY is simply cheap because many investors (wrongly, IMO) consider it a loser company.

My largest other holdings are CLF, MMM, and DE. None of these three is exactly cheap; however, CLF has turned into a rocketship for reasons you already know, while MMM and DE are simply great companies that will likely continue to be great companies for many years.

Good luck.