On today’s show, we’ll discuss another empty room – an opportunity ignored by most investors because they either don’t want to or can’t participate.
Andy Acker is a Portfolio Manager at our anchor sponsor, Janus Henderson Investors, where he manages the firm’s healthcare strategies. Janus Henderson is a global asset manager with $300B in assets under management, and Andy oversees the firm’s Global Life Sciences strategy and its Biotechnology strategy. Biotech stocks have been crushed despite significant advances in drug development, making it a proverbial empty room with only specialists and contrarians left standing.
Our conversation starts with Andy’s path to becoming a healthcare investor, scientific innovation over his time at Janus Henderson, translation of science into commercial success for businesses, and the 90/90 rule for how stocks behave. We then turn to his investment process across filtering ideas, research, assessment of management teams and commercial success, portfolio construction, trading around names, and private crossover investing. We close with Andy’s perspective on opportunities and risks to the space from here, and green shoots he sees that might fill seats in the empty room.
2:20 Andy’s background
4:39 Business behind biotech
10:20 Scientific advances
14:38 Success rate of clinical trials
18:41 Volatility in the biotech sector
23:17 Research process
28:09 Importance of management teams
32:12 Making decisions and stock selection
35:53 Portfolio construction
38:33 Incorporating private investments
44:06 Significant risks
46:14 Changing tide in biotech
47:58 Closing questions