The past few days have seen the stock market tumble on investor concerns over the global spread of a new strain of coronavirus—2019-nCoV—discovered in the Chinese city of Wuhan. So far, 2019 nCoV had been linked to hundreds of cases and dozens of deaths in China, as well as a growing number of cases in 12 other countries including 5 in the U.S.
It’s too soon to say whether these concerns will precipitate a sustained fall-off in biopharma among other stocks, or whether 2020 will be more like last year. Investors rallied to biotech stocks late in 2019, making the year one of double-digit growth for six of seven exchange-traded funds (ETFs) consisting of biotech equities, pharma shares, or various mixes of both.
As expected, biotech ETFs performed the best. The SPDR S&P Biotech ETF (XBI) showed the strongest return on investment, surging 33% to $95 at the close of 2019, up from $71.75 a year earlier. Two other biotech ETFs enjoyed approximately 25% year-over-year gains: the largest ETF, the iShares Nasdaq Biotechnology ETF (IBB), finished 25% higher, a whisker ahead of the SPDR S&P Pharmaceuticals ETF.
Among the other ETFs, the First Trust NYSE Arca Biotech ETF (FBT) saw a 20% year-over-year gain, followed in descending order by gains of 15% for the NYSE ARCA Pharmaceutical Index (^DRG), 14% for the iShares U.S. Pharmaceuticals ETF (IHE), and just 3.8% for the Invesco Dynamic Pharmaceuticals ETF (PJP).
A good year for stocks is a good year for equity analysts covering those shares and markets. For the most part, analysts highlighted companies whose shares they expected would rise, and mostly did—with less frequent “hold” or “sell” recommendations for the underperformers.
Following is GEN Edge’s A-list of 10 Analysts to Watch in 2020. These 10 individuals are among the top analysts covering the life sciences industry, including biotech, biopharma and diagnostics.
We used two criteria for inclusion. One is a high ranking—within the top 700 of almost 6,000 analysts ranked by TipRanks, a website that evaluates public stock recommendations made by ﬁnancial analysts and financial bloggers, then ranks them based on accuracy and performance. Only the top-ranked analyst of any particular firm was included.
Since TipRanks rankings assess the performances of analysts over 10-year periods, GEN Edge also based this list on at least one instance within the past year where an analyst demonstrated market insight by recommending “buy” ratings on stocks that went on to perform, or recommending hold or sell ratings on companies whose shares went on to fall in price.
(This is by no means a comprehensive list, and we welcome recommendations of additional analysts who should be on our – and your – radar screen. Please send them along to GEN Edge senior news editor Alex Philippidis at aphilippidis [at] genengnews dot com.)
A-LIST: Ten Life Science Analysts to Watch
BRIAN ABRAHAMS, MD — RBC Capital Markets
Title: Senior Biotechnology Analyst and Co-Head of RBC Biotechnology Research
Bio: Abrahams is a Managing Director at RBC and Co-Head of RBC Biotechnology Research. He joined RBC in July 2017. He has 15+ years of experience following large, mid, and small cap biotechs. Prior to RBC, he spent time in biotech equity research at Jefferies, Wells Fargo, and CIBC World Markets/Oppenheimer & Co. He is a licensed non-practicing physician and holds a medical degree from the Albert Einstein College of Medicine. He did his undergraduate studies at Yale University, where he graduated magna cum laude with a degree in Molecular Biophysics & Biochemistry.
Recent insight: On September 4, 2019, Abrahams initiated coverage on Constellation Pharmaceuticals with an Outperform rating, with an expectation that the stock’s valuation at that time substantially underappreciated the prospects demonstrated by lead program CPI-0610 in myelofibrosis, with potential for significant upside on additional near-term data updates from that program.
Coverage: Biopharma companies including BioCryst, Biogen, Constellation Pharmaceuticals, Corbus Pharmaceuticals, 89Bio, Enanta, Galapagos, Gilead Sciences, Hookipa Pharma, Incyte, Intercept, Intra-Cellular Therapies, Karyopharm Therapeutics, Merus, Neurocrine Biosciences, Ovid Therapeutics, Proteostasis, PTC Therapeutics, Sage Therapeutics, Sarepta Therapeutics, Theratechnologies, and Vertex Pharmaceuticals.
KAREN ANDERSEN, CFA — Morningstar
Title: Healthcare Strategist for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. She is responsible for biotechnology research.
Bio: Before joining Morningstar in 2005, Andersen received an MBA from Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and was a Jones Scholar. She has research experience in both academia (Rice University, University of Queensland) and industry (Lexicon Genetics and a subsidiary of Genzyme).
She also holds a bachelor’s degree in biochemistry from Rice, where she graduated magna cum laude. She holds the Chartered Financial Analyst designation. She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013 (the last year the survey was conducted).
Recent insight: For more than a year, Andersen has maintained a $119 price target on BioMarin Pharmaceutical, even as shares dipped to $73.53 last November. Shares since bounced back to $91 on January 10 before another dip. Three days later, she reaffirmed the $119 target: “BioMarin’s global pricing strategy for its rare-disease drugs as well as the serious nature of these conditions limits future pricing and litigation risk, despite high price tags, and Medicare exposure is minimal.”
Coverage: Biopharma companies include AbbVie, Amgen, Bayer, Biogen, BioMarin Pharmaceutical, Bristol-Myers Squibb, Eli Lilly, Gilead Sciences, GlaxoSmithKline, Incyte, Johnson & Johnson, Novartis, Pfizer, Regeneron Pharmaceuticals, Roche, and Sanofi.
BRANDON COUILLARD — Jefferies
Title: Senior Equity Research Analyst covering the Life Science Tools, Diagnostics and Dental industries.
Bio: Couillard joined the firm in 2009 and has covered the sector for more than a decade. He was ranked #1 stock picker in the Healthcare Equipment and Supplies sector by Starmine in 2015. Prior to joining Jefferies, he was at Bank of America Securities, covering life science research supply, clinical diagnostics, dental products, and CRO companies. He has a BA in Economics from Rhodes College.
Recent insight: In February, 2019, Couillard maintained his “buy” rating on Bio-Rad Laboratories with a $400 share price target, while shares closed below $262. He noted that an increase in the publication of research studies using the company’s Droplet Digital PCR System is a “good proxy of demand that adds conviction” to his growth outlook for the technology. Shares climbed nearly 50%, to a recent high of $388 on January 9.
Coverage: Tools/tech companies including Agilent, Avantor, Bio-Rad Laboratories, Bruker, and Myriad Genetics.
DERIK DE BRUIN – Bank of America Global Research
Title: Managing Director, Life Sciences & Diagnostics Tools Analyst
Bio: De Bruin joined BoA in 2011 from UBS Investment Bank, where he was Executive Director, Life Sciences Tools and Diagnostics Analyst. Previously he was an analyst at Credit Suisse First Boston, and a research associate at Salomon Smith Barney.
Recent insight: Last July, De Bruin downgraded Bank of America Merrill Lynch’s rating for Illumina from “buy” to “underperform,” and cut his price target for the company’s stock from $355 to $290, after Illumina lowered its second-quarter revenue projection to $835 million (Illumina ultimately reported $838 million in Q2 2019). “The miss was particularly surprising to us given positive commentary from management in recent months, and the number of issues that cropped up in the quarter.” Shares tumbled 16% on July 12 to $305 and fell below $291 on October 25 before rebounding.
Coverage: Tools/Diagnostics companies including Agilent, Avantor, Bruker, Exact Sciences, Guardant Health, Illumina, PerkinElmer, Personalis, Quest Diagnostics, QIAGEN, Thermo Fisher Scientific, and 10x Genomics.
CORY KASIMOV — J.P. Morgan
Title: Senior Large Cap Biotechnology Analyst
Bio: Joined the firm in 2007 from Oppenheimer & Co., where he was a Biotechnology Analyst. He graduated from Tulane University with a BSc in Cellular and Molecular Biology, an MPH in Health Systems Management from Tulane’s School of Public Health and Tropical Management, and an MBA in Finance and Marketing from Tulane’s A.B. Freeman School of Business.
Recent insight: In July 2019, Kasimov assumed coverage of Alexion Pharmaceuticals with an Overweight rating and $172 price target, citing confidence in Alexion’s greater than 70% guidance by mid-2020 on conversion of patients from Soliris to Ultomiris. The company is on its way to that figure, reporting conversion rates rising to 59% in U.S. and 60% in Germany, according to the company’s presentation at the recent J.P. Morgan 38th Healthcare Conference.
Coverage: Biopharma companies including Acadia Pharmaceuticals, Acorda Therapeutics, Alexion, Alkermes, Allogene, Amgen, Biogen, BioMarin, BioNTech, bluebird bio, Clovis Oncology, Editas Medicine, Gilead Sciences, GW Pharmaceuticals, Incyte, Jounce Therapeutics, Moderna, Novocure, Puma Biotechnology, Regeneron Pharmaceuticals, Sage Therapeutics, Seattle Genetics, Ultragenyx Pharmaceutical, and Vertex.
SUNG JI NAM – BTIG
Title: Director and Life Science and Diagnostic Tools Analyst
Bio: Before joining BTIG in 2017, Nam was a Senior Analyst within Equity Research at Avondale Partners. She held similar roles at Cantor Fitzgerald and Gleacher & Company, where she was named an All-America Research Team Rising Star by Institutional Investor in 2011. Ms. Nam began her career in equity research at J.P. Morgan, covering life science tools, diagnostics, small to mid-cap medical technology and pharmaceutical services companies.
Previously, she was a senior program officer at the Gordon and Betty Moore Foundation. She holds a BA in chemistry and an MBA, both from Harvard University.
Recent insight: In December, 2019, Nam initiated coverage of Centogene with a “Buy” rating, citing “significant upside” to the company’s valuation from its current inflection point, from which she said it may “more meaningfully monetize its value proposition” by scaling its “rich” global rare disease database—which includes data from Europe, the Middle East, Northern Africa, and Latin America—and leveraging its large physician networks. Centogene shares have risen 18% from $12.25 to a recent high of $14.49 on January 16.
Coverage: Tools/tech companies including Bruker, Castle Biosciences, Centogene, Fluidigm, Luminex, Oxford Immunotec, Quanterix, Thermo Fisher Scientific, Veracyte, and Waters.
DOUG SCHENKEL — Cowen
Title: Managing Director and Senior Research Analyst in the Life Science & Diagnostic Tools Research Group.
Bio: Schenkel returned to Cowen in 2005, joining its Medical Supplies and Devices team, after serving as a vice president with Global Biomedical Partners, where he managed a life science cross-over fund. He previously worked in private equity with Triumph Capital Group, having started his career with Cowen in the health care investment banking group. He led the build out of Cowen’s Life Science & Diagnostic Tools team in 2007.
Recent insight: On December 13, 2019, Exact Sciences was named as Cowen’s favorite large-cap, growth Tools stock pick. Cowen sees a path to ~50% upside from current levels over the next 12 months. Schenkel’s team expects robust Cologuard growth, and is increasingly positive on how much the recently-completed acquisition of Genomic Health can help Exact Sciences commercially and operationally. He believes the product pipeline is under-appreciated, and feel concerns are disproportionally captured in current valuation.
Coverage: Tools/tech and diagnostic companies including Agilent, Danaher, Exact Sciences, Illumina, Invitae, PacBio, Quanterix, Thermo Fisher Scientific, and 10x Genomics.
CATHERINE SCHULTE – Baird
Title: Senior Research Analyst, Life Sciences & Diagnostics
Bio: Prior to joining Baird in 2014, she worked at Medtronic and Pathfinder Technologies, with prior internships at Vanderbilt University Medical Center and Avondale Partners. In 2019, she was recognized by the StarMine Analyst Awards from Refinitiv as the top stock picker for Life Sciences Tools & Services. Schulte received a BSE in Biomedical Engineering from Duke University.
Recent insight: Last September, Schulte raised her price target on cancer diagnostics developer Castle Biosciences from $27 a share to $31 a share after new physician additions and improved reimbursement collections led to strong Q2 results: Year-over-year, quarterly recognized revenue more than doubled from $4 million to $10.7 million, while DecisionDx-Melanoma test report volume surged 27%. She also cited the company’s expansion of its sales force and publication of positive clinical studies on DecisionDx-Melanoma.
Coverage: Tools/tech companies including Agilent, Avantor, Castle Biosciences, Exact Sciences, Natera, Thermo Fisher Scientific, Twist Bioscience, and Waters.
JOSEPH P. SCHWARTZ – SVB Leerink
Title: Senior Research Analyst covering Rare Diseases.
Bio: Schwartz joined the firm in 2003 after providing economic and strategic consulting services to biotechnology and pharmaceutical companies with Charles River Associates. Earlier, he held equity research positions at SG Cowen, State Street Research, and J.P. Morgan, where he analyzed drivers of investments in the healthcare, retail, consumer, media, and entertainment sectors.
Schwartz was named #1 Stock Picker for Pharmaceuticals in the 2011 FT/StarMine Analyst Awards. In 2010, he earned the Wall Street Journal’s #1 ranking for biotech stock picking as part of its “Best on the Street” analysts survey (he’d previously come in #2). Schwartz earned an MBA from Babson College and a BA in Economics from Colby College.
Recent insight: On December 23, 2019, Schwartz commented positively on Sarepta Therapeutics licensing to Roche ex-U.S. rights to lead gene therapy pipeline candidate SRP-9001 for Duchenne muscular dystrophy —which could generate more than $2.85 billion for Sarepta: “This licensing agreement instills added confidence in SRPT [Sarepta]’s gene therapy programs and removes any remaining financial overhang for SRPT.”
Coverage: Biopharma companies including Achillion Pharmaceuticals, Amicus Therapeutics, Arena Pharmaceuticals, Ascendis Pharma, Aurinia Pharmaceuticals, BioMarin, Crinetics Pharmaceuticals, DBV Technologies, Fulcrum Therapeutics, Gossamer Bio, inflaRx, Insmed, Millendo Therapeutics, Mereo BioPharma Group, Protagonist Therapeutics, Reata Pharmaceuticals, Retrophin, Sarepta, Solid, Synlogic, Ultragenyx Pharmaceutical, and uniQure.
SILVAN TUERKCAN, PhD – Oppenheimer & Co.
Title: Director and Senior Analyst covering Biotechnology.
Bio: Prior to joining Oppenheimer, Tuerkcan worked on the Large Cap Pharmaceuticals team at Goldman Sachs as a PhD fellow. He previously spent five years in research, working at the Stanford University School of Medicine and the Pasteur Institute focusing on imaging technologies in oncology.
Tuerkcan holds a BSc in Physics from McGill University and a PhD in Biophysics from Ecole Polytechnique (France). He co-authored 22 peer-review articles and holds three patents. He also holds a Certificate in Entrepreneurship & Innovation from Stanford Graduate School of Business.
Recent insight: On January 6, Tuerkcan was quoted by the Financial Times observing that shares of CRISPR-based drug developers, including companies he covers, are expected to start acting like shares of traditional biotechs, with prices rising or falling based on data readouts, after several years of stock performance being tied to announcements of collaborations and partnerships: “We need to see the promise of CRISPR—that you can develop a superior product to gene therapy, precisely—holds up.”
Coverage: Biopharma companies including Constellation Pharmaceuticals, CRISPR Therapeutics, Editas Medicine, Exelixis, Intellia Therapeutics, and Seattle Genetics.