1 00:00:00,120 --> 00:00:03,920 Speaker 1: These sees. Bloomberg Business Week with Carol Messer and Tim 2 00:00:03,960 --> 00:00:08,000 Speaker 1: Stanovic on Bloomberg Radio. All right, Tim, time take a 3 00:00:08,000 --> 00:00:10,840 Speaker 1: little bit of a deep dive into biotech stocks, because 4 00:00:10,880 --> 00:00:13,520 Speaker 1: as a whole, they were down about last year compared 5 00:00:13,560 --> 00:00:16,000 Speaker 1: with a thirty three percent drop in the now's deck 6 00:00:16,040 --> 00:00:18,240 Speaker 1: one hundreds. A little perspective there, and I do feel 7 00:00:18,280 --> 00:00:20,880 Speaker 1: like a day does not compile that there isn't some 8 00:00:20,960 --> 00:00:23,560 Speaker 1: news out of the biotech space regarding test trials on 9 00:00:23,640 --> 00:00:26,639 Speaker 1: some drug development or some kind of investment or deal 10 00:00:26,800 --> 00:00:29,440 Speaker 1: that going on. So really smart for us to take 11 00:00:29,880 --> 00:00:31,920 Speaker 1: a deeper look into this group. You're really excited to 12 00:00:31,960 --> 00:00:35,400 Speaker 1: speak to Debra net Shirt Health Sciences, portfolio manager at 13 00:00:35,440 --> 00:00:38,800 Speaker 1: the registered investment advisor Jennison Associates. It's got a hundred 14 00:00:38,800 --> 00:00:41,880 Speaker 1: and sixty four billion dollars in assets under management. Debra 15 00:00:42,040 --> 00:00:44,640 Speaker 1: joins us on the phone from New York City. Good 16 00:00:44,640 --> 00:00:48,199 Speaker 1: to have you with us this afternoon. So before we 17 00:00:48,200 --> 00:00:52,040 Speaker 1: we start about talking about what's happening this year, let's 18 00:00:52,080 --> 00:00:53,720 Speaker 1: just think back to the last couple of years, because 19 00:00:53,720 --> 00:00:55,880 Speaker 1: I think for a lot of investors, biotech came on 20 00:00:55,920 --> 00:01:00,400 Speaker 1: their radar with talking about you know, companies like Derna 21 00:01:00,680 --> 00:01:03,560 Speaker 1: developing an m R and a vaccine, and perhaps you know, 22 00:01:03,840 --> 00:01:07,280 Speaker 1: a different group of investors now paying attention to a 23 00:01:07,319 --> 00:01:10,480 Speaker 1: group of companies that has been historically volatile but has 24 00:01:10,520 --> 00:01:15,000 Speaker 1: also offered potentially a lot of promise. Yeah, I think 25 00:01:15,040 --> 00:01:18,560 Speaker 1: that's right. I think that when you look at all 26 00:01:18,600 --> 00:01:21,800 Speaker 1: of the different UM investors that came into the market 27 00:01:21,920 --> 00:01:25,440 Speaker 1: during COVID, they looked at the madernas and the biontics 28 00:01:25,440 --> 00:01:28,760 Speaker 1: and the Nova vaxes and all of the rapid development 29 00:01:28,920 --> 00:01:32,560 Speaker 1: of the COVID nineteen vaccines and started to think that 30 00:01:32,720 --> 00:01:35,360 Speaker 1: there was going to be an opportunity to see accelerated 31 00:01:35,400 --> 00:01:41,080 Speaker 1: development UM like this in other categories. And the problem 32 00:01:41,200 --> 00:01:44,240 Speaker 1: with UM, you know, with that is is all of 33 00:01:44,319 --> 00:01:49,840 Speaker 1: these vaccines were really developed under an emergency use authorization 34 00:01:49,880 --> 00:01:52,960 Speaker 1: and that was a very distinct pathway used at the FDA, 35 00:01:53,600 --> 00:01:57,720 Speaker 1: and and development takes time, and I don't think that 36 00:01:57,840 --> 00:02:00,720 Speaker 1: the pathway that the FDA used and the rapid development 37 00:02:00,760 --> 00:02:03,240 Speaker 1: we saw in COVID nineteen vaccines is really going to 38 00:02:03,320 --> 00:02:06,560 Speaker 1: be relevant. And so some of these investors really expected 39 00:02:06,640 --> 00:02:11,080 Speaker 1: us to see follow on with with UM. COVID nineteen 40 00:02:11,240 --> 00:02:13,919 Speaker 1: paired with RSC, paired with flu and really start to 41 00:02:13,960 --> 00:02:16,160 Speaker 1: be able to see these vaccines kind of coming out 42 00:02:16,160 --> 00:02:19,240 Speaker 1: a really rapid rate and UM and some of the 43 00:02:19,320 --> 00:02:22,120 Speaker 1: reality of the kind of going back to the normal 44 00:02:22,200 --> 00:02:26,640 Speaker 1: drug development timelines, and then just the reality of the 45 00:02:27,200 --> 00:02:32,919 Speaker 1: you know, the bulliest of patient population that these vaccines 46 00:02:32,960 --> 00:02:36,000 Speaker 1: were serving kind of brought people back to reality. You know. 47 00:02:36,080 --> 00:02:39,920 Speaker 1: I have to say I always love UM the different conferences, 48 00:02:40,520 --> 00:02:43,640 Speaker 1: whether it's ASCO which looks you know, into cancer, because 49 00:02:43,639 --> 00:02:45,440 Speaker 1: you always get a lot of news out of it 50 00:02:45,680 --> 00:02:48,120 Speaker 1: in terms of drug development or what companies are working 51 00:02:48,120 --> 00:02:51,400 Speaker 1: on what So what might kind of be some really 52 00:02:51,480 --> 00:02:54,960 Speaker 1: innovation UM or innovation that we're going to get out 53 00:02:54,960 --> 00:02:58,200 Speaker 1: of the biotech sector this year that investors should maybe 54 00:02:58,200 --> 00:03:02,919 Speaker 1: take note of. Well, there's I would say, there there's 55 00:03:03,040 --> 00:03:05,959 Speaker 1: there's always a lot of innovation, and there's a lot 56 00:03:06,000 --> 00:03:08,240 Speaker 1: of UM. There's a lot of data that comes out 57 00:03:08,240 --> 00:03:11,360 Speaker 1: at all the of all of the conferences, So you know, 58 00:03:11,440 --> 00:03:14,040 Speaker 1: there's We're we're starting to see a lot of things 59 00:03:14,280 --> 00:03:16,680 Speaker 1: UM you know coming out a lot of a lot 60 00:03:16,680 --> 00:03:20,000 Speaker 1: of innovation is actually interestingly happening in the larger cap 61 00:03:20,000 --> 00:03:22,800 Speaker 1: companies and it's the first time that we've we've seen 62 00:03:23,200 --> 00:03:27,320 Speaker 1: the larger cap companies start to UM enter new product cycles, 63 00:03:27,480 --> 00:03:31,080 Speaker 1: have a resurgence and growth and and have the ability 64 00:03:31,200 --> 00:03:35,520 Speaker 1: to to really positively impact their revenue and EPs profile 65 00:03:36,000 --> 00:03:37,839 Speaker 1: over the next couple of years by some of these 66 00:03:37,840 --> 00:03:41,920 Speaker 1: big markets. Obviously, we've seen UM a huge increase in 67 00:03:42,160 --> 00:03:44,840 Speaker 1: the use of the g lp ones that are approved 68 00:03:44,840 --> 00:03:48,560 Speaker 1: for diabetes but are also UM in certain instances, UM 69 00:03:48,600 --> 00:03:51,720 Speaker 1: approved for obesity and and soon to hopefully be approved 70 00:03:51,760 --> 00:03:55,040 Speaker 1: for obesity for for other companies. And you're seeing a 71 00:03:55,120 --> 00:04:00,320 Speaker 1: huge use of this group of drugs, and I think 72 00:04:00,360 --> 00:04:03,120 Speaker 1: you're gonna start to see a lot of additional indications 73 00:04:03,160 --> 00:04:07,640 Speaker 1: coming out of that. UM. We're starting to see some UM. 74 00:04:07,680 --> 00:04:10,000 Speaker 1: You know, we have gene therapies that have now been 75 00:04:10,040 --> 00:04:11,920 Speaker 1: approved better on the market. So it's going to be 76 00:04:11,960 --> 00:04:15,800 Speaker 1: really interesting to see how the business models for these 77 00:04:15,800 --> 00:04:22,840 Speaker 1: single very expensive yet UM. You know, sometimes curative UM 78 00:04:24,200 --> 00:04:26,160 Speaker 1: are really gonna be able to be Now debor forgive 79 00:04:26,200 --> 00:04:28,480 Speaker 1: me for interrupting, And I know your portfolio manage, and 80 00:04:28,520 --> 00:04:30,440 Speaker 1: I don't know how deep you can go for us. 81 00:04:30,720 --> 00:04:33,760 Speaker 1: I know our audience always loves whether it's sectors specifically 82 00:04:34,040 --> 00:04:36,880 Speaker 1: or talking some names like are there, And again I 83 00:04:36,880 --> 00:04:38,800 Speaker 1: don't know how deep you can go. Can you throw 84 00:04:38,839 --> 00:04:40,520 Speaker 1: out some names to us that you think, Wow, these 85 00:04:40,560 --> 00:04:43,400 Speaker 1: are definitely on my radar, Or if I'm looking to 86 00:04:43,400 --> 00:04:45,599 Speaker 1: commit some new money for investors, that's what I'm going 87 00:04:45,640 --> 00:04:48,760 Speaker 1: to think about. I would love to do that, but 88 00:04:48,960 --> 00:04:51,279 Speaker 1: unfortunately I would have had to UM, I would have 89 00:04:51,320 --> 00:04:54,279 Speaker 1: had to have things cleared before doing that. On today's program, 90 00:04:54,520 --> 00:04:57,840 Speaker 1: No problem at all, Deborah. We needed to ask, Hey, Um, 91 00:04:57,920 --> 00:04:59,680 Speaker 1: one thing that I really want to hear from you is, 92 00:05:00,200 --> 00:05:03,200 Speaker 1: obviously the investment question is is really fascinating. But at 93 00:05:03,200 --> 00:05:06,159 Speaker 1: the same time, your cover a space that is just 94 00:05:06,200 --> 00:05:09,200 Speaker 1: really exciting from a human perspective. We all know people 95 00:05:09,320 --> 00:05:12,440 Speaker 1: who have been affected by just terrible diseases, and I wonder, 96 00:05:12,839 --> 00:05:15,039 Speaker 1: given what you cover and how much research you do 97 00:05:15,040 --> 00:05:18,440 Speaker 1: into these companies, what just excites you about living in 98 00:05:18,440 --> 00:05:21,599 Speaker 1: a world where we could soon, you know, be living 99 00:05:21,640 --> 00:05:25,960 Speaker 1: longer and saying goodbye to some diseases that previously were 100 00:05:25,960 --> 00:05:30,000 Speaker 1: death sentences. I mean, I think exactly that I think 101 00:05:30,320 --> 00:05:33,359 Speaker 1: you know. I always I always say that it's a 102 00:05:33,360 --> 00:05:35,000 Speaker 1: gift to be able to get what I do, because 103 00:05:35,040 --> 00:05:39,080 Speaker 1: if you have endless intellectual curiosity like I do, UM, 104 00:05:39,240 --> 00:05:41,320 Speaker 1: you can't you really are able to stay on the 105 00:05:41,360 --> 00:05:45,200 Speaker 1: forefront of really looking at the at the diseases and 106 00:05:45,440 --> 00:05:47,440 Speaker 1: UM and all of the new innovative treatments that are 107 00:05:47,480 --> 00:05:50,719 Speaker 1: coming out and UM. You know. And I also view 108 00:05:51,279 --> 00:05:55,320 Speaker 1: my job as a shareholder of companies to be helping 109 00:05:55,400 --> 00:05:58,560 Speaker 1: companies who are going at this for the first time 110 00:05:58,560 --> 00:06:01,800 Speaker 1: and helping them to Okay, so fall into paint a 111 00:06:01,839 --> 00:06:05,240 Speaker 1: picture for us, you know, ten fifteen years from now 112 00:06:06,160 --> 00:06:08,480 Speaker 1: when it comes to some of these moon shots. I mean, 113 00:06:09,279 --> 00:06:12,480 Speaker 1: do we say goodbye to to chemotherapy and and instead 114 00:06:12,520 --> 00:06:17,360 Speaker 1: we can talk about gene therapy or I'm taking well, 115 00:06:17,400 --> 00:06:19,120 Speaker 1: I mean, look, I you know, I hope that in 116 00:06:19,200 --> 00:06:22,560 Speaker 1: ten years we are saying goodbye to to chemotherapy or 117 00:06:22,600 --> 00:06:26,480 Speaker 1: we're finding a way. We've seen innovation with chemotherapy through 118 00:06:27,279 --> 00:06:31,120 Speaker 1: UM drugs called antibody drug conjugates that take the chemotherapy 119 00:06:31,120 --> 00:06:33,320 Speaker 1: and develop it to only the cells that need it, 120 00:06:33,400 --> 00:06:37,080 Speaker 1: as opposed to a blading all fills, and so that 121 00:06:37,120 --> 00:06:41,960 Speaker 1: has allowed cancer patients to already receive chemotherapy in a 122 00:06:42,000 --> 00:06:45,000 Speaker 1: way that it's not so toxic. UM. So hopefully we're 123 00:06:45,040 --> 00:06:48,080 Speaker 1: either you know, continuing down that and you know, there 124 00:06:48,200 --> 00:06:51,960 Speaker 1: could always be a use for chemotherapy. But hopefully in 125 00:06:52,080 --> 00:06:56,200 Speaker 1: a decade we are we're really changing the curve on 126 00:06:56,279 --> 00:07:00,719 Speaker 1: personalized medicine where we're really starting to understand and individual 127 00:07:00,839 --> 00:07:04,360 Speaker 1: cancer in the individual person and being able to target 128 00:07:04,360 --> 00:07:08,440 Speaker 1: that cancer in a super specific way. UM and you know, 129 00:07:08,520 --> 00:07:11,720 Speaker 1: and curing cancer individually, one person at a time. And 130 00:07:11,760 --> 00:07:14,800 Speaker 1: we know that you're you're um. You know. Part of 131 00:07:14,840 --> 00:07:17,600 Speaker 1: the managers for the PGM, Jennison Health Science has fun 132 00:07:17,640 --> 00:07:19,520 Speaker 1: And I just want to because our audience cares about 133 00:07:19,520 --> 00:07:21,840 Speaker 1: things like this. Three years, if I look at the 134 00:07:21,840 --> 00:07:25,080 Speaker 1: average annual performance according to Bloomberg Data up about eleven, 135 00:07:25,080 --> 00:07:29,480 Speaker 1: putting it in the ninety percentile UM and United Healthy, 136 00:07:29,560 --> 00:07:32,400 Speaker 1: like literally Mark, these are some names that are in it, Humana. 137 00:07:32,520 --> 00:07:34,800 Speaker 1: I mean, as you say, there's a lot of large 138 00:07:34,800 --> 00:07:37,720 Speaker 1: cap names. While we often think of biotech, it's kind 139 00:07:37,720 --> 00:07:40,160 Speaker 1: of smaller startups. It really is a lot of these 140 00:07:40,160 --> 00:07:43,640 Speaker 1: bigger cap names that are very involved in setting the 141 00:07:43,680 --> 00:07:46,280 Speaker 1: trends of what's to come when it comes to healthcare. 142 00:07:47,680 --> 00:07:51,160 Speaker 1: It is the larger companies are definitely the ones who 143 00:07:51,200 --> 00:07:53,520 Speaker 1: are saying the trends in a in a way, UM 144 00:07:53,720 --> 00:07:56,320 Speaker 1: and the innovation happens in both camps a lot of this. 145 00:07:56,600 --> 00:07:59,000 Speaker 1: A lot of the innovation that is currently in the 146 00:07:59,080 --> 00:08:02,720 Speaker 1: hands of Eli Lily or a Murk or or you 147 00:08:02,800 --> 00:08:06,000 Speaker 1: name the large cap company came from a small cap biotech. 148 00:08:06,080 --> 00:08:09,800 Speaker 1: So it's not to say that it's the innovation starts 149 00:08:09,800 --> 00:08:11,920 Speaker 1: at the larger or the small. It kind of happens 150 00:08:11,960 --> 00:08:16,800 Speaker 1: across the spectrum. But you know, the super innovative companies 151 00:08:16,960 --> 00:08:19,800 Speaker 1: that develop drugs that are going to be incredibly efficacious, 152 00:08:20,560 --> 00:08:23,559 Speaker 1: typically we'll wind up becoming part of a larger company 153 00:08:23,640 --> 00:08:26,920 Speaker 1: over time. So there's an ecosystem there that that has worked, 154 00:08:27,000 --> 00:08:29,080 Speaker 1: you know, pretty well over time. And listen, do you 155 00:08:29,160 --> 00:08:31,560 Speaker 1: really care about what the Fed does or what inflation does? 156 00:08:31,600 --> 00:08:34,120 Speaker 1: And just got about thirty seconds. Does that really shape 157 00:08:34,160 --> 00:08:38,560 Speaker 1: your investment decisions? I mean it has to around the edges. 158 00:08:38,679 --> 00:08:40,959 Speaker 1: I think all of us have had to have had 159 00:08:41,000 --> 00:08:46,720 Speaker 1: to become armchair macro um macro experts here and there um. 160 00:08:46,760 --> 00:08:48,559 Speaker 1: But at the end of the day, my colleagues and 161 00:08:48,600 --> 00:08:50,640 Speaker 1: I Agena been really trying to focus on the fundamentals. 162 00:08:50,679 --> 00:08:54,040 Speaker 1: All right, really appreciate it, Deborah and uh look forward 163 00:08:54,040 --> 00:08:55,880 Speaker 1: to next time and maybe digging a little bit deeper 164 00:08:55,880 --> 00:08:58,640 Speaker 1: into your portfolio holdings. A Debora net Church. She is 165 00:08:58,679 --> 00:09:01,280 Speaker 1: health Sciences portfolio man and your Jennison Associates a