For stock market analyst David Amsellem, keeping a close eye on drug companies is what he likes to do. In fact, the Senior Research Analyst at the investment firm Piper Jaffray & Co. is recognized as the number-one-ranked analyst in North America for “accuracy of earnings estimates in the pharmaceuticals sector” according to a Financial Times/StarMine ‘Best Brokerage Analyst’ survey.
So he’s also pretty good at sizing up the drug industry – particularly ‘specialty pharma’ companies. These are companies making expensive brand name drugs for chronic conditions or complex care issues like cancer, HIV-AIDS, hemophilia and other bleeding disorders, multiple sclerosis, rheumatoid arthritis and others.
Specialty pharmaceutical companies usually focus the majority of their efforts on one or two therapeutic areas that are served by specialized physicians. Their traditional mode of operation is to acquire under-promoted branded products from Big Pharma companies that are generating lower sales, and then try to significantly increase revenues through aggressive targeted marketing and promotional activities.
Writing in the 2009 Wall Street Transcripts Pharmaceuticals Report, Mr. Amsellem calls a spade a spade, in ways that are interesting not only to stock market investors, but to those of us whose doctors have ever written us a prescription for any name brand medication.
“Drug companies that are developing products that are not necessarily differentiated, that are more ‘me-too’ type products, that are not necessarily addressing major unmet medical needs, are finding it more and more difficult to get adequate compensation.” Continue reading