We remain very confident and optimistic on the biotech sector on a long term basis. We would highlight four key takeaways for your listeners in terms of why we remain confident here.
Firstly demographics, secondly innovation, thirdly regulation and finally valuation.
On Demographics they are very supportive of the healthcare sector generally, one example we would highlight is the fact that we are all living longer. We know as the older you get the more healthcare you use.
Turning to innovation, this is the life blood of the biotechnology sector on a long term basis. It is the key driver of these companies, these small cap companies, the M&A, and there's a couple of really good examples of where new disruptive therapies have been approved over the last year in both gene therapy and cell therapy. We think that this innovation is very strong and set to continue.
Thirdly regulation – the operating environment for these companies is very good at the moment. The FDA is supportive of all stakeholders and that includes the biopharma businesses. In fact new drug approvals from the FDA are at all time highs.
And then finally looking a valuation, the small and mid cap sector, part of the sector remains certainly interesting on a valuation point of view, versus history, and if you look at some of those large cap companies actually they’re trading at levels we haven’t seen for a number of years they certainly look interesting on a valuation basis.