GLP-1 weight-loss drugs have pushed the biotech sector to new heights as demand steadily increases. But despite the drugs’ popularity, there are other investment opportunities within the biotech sector. Goldman Sachs lead analyst for the US biotechnology sector Salveen Richter joins Market Domination to discuss some of the most overlooked biotech plays.
"When you look at healthcare, you tend to want to gravitate towards the more defensive sectors in a period like this. Within biotech, there are defensive aspects, but there are non-defensive aspects. So with regard to rates, obviously a positive for the sector if we start to see a rate cut. But if you’re in a recessionary environment, then you can kind of pass through that situation and people will determine where they’re going to allocate for growth and more of a defensive play, which will probably be these larger-cap, more quality-oriented names," Richter explains. She points to Amgen (AMGN) as an investment opportunity, as alongside its GLP-1 offerings, it’s working on products to treat cancer and autoimmune diseases and is leveraging AI in its genetic medicine efforts.
She also points to Vertex (VRTX) as an opportunity, as it is "not only furthering their cystic fibrosis monopoly essentially, but also bringing in a non-opioid pain version." She notes that Vertex is also looking to build a cancer vertical as well as innovate in the autoimmune space. Richter explains that when choosing a name like Vertex, "it’s much more about where do you see innovation and sustainable growth and a kind of first-in-class outlook?" She adds that diversification is key, and both Amgen and Vertex are ahead of their competitors on that front.
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