News from our advisers
Our principal specialist pharma and biotech adviser wrote at the end of June:
In June NAV decreased 4.5% during the month, approximately equal to the 4.4% fall in the benchmark.
European pharma companies were particularly hard hit. GlaxoSmithKline continues to suffer from a 50% decline in sales of its blockbuster diabetes drug Avandia after a recent academic study suggested that the drug posed cardiovascular risks to patients.
This adviser's GBP performance numbers since their fund's inception in 4/95 are:
Sanofi-Aventis suffered a major setback to its obesity drug Zimulti (also known as Acomplia) as the company failed to convince US regulators that the drug’s effectiveness outweighed the apparent risk of suicidality for patients. Finally, Novartis continues to suffer an approval delay for Galvus, its potential blockbuster diabetes drug. The biotechnology sector has also had its share of headline problems, as Amgen’s blockbuster Epogen franchise has come under regulatory scrutiny for the alleged overuse of these products.
GTI comment: it’s all bad news, isn’t it? The pharma / biotech sector has had precious little to recommend it for several years except for the hilarious focus-group generated drug names, GLOBAL THEMES which sound like characters from a Star Trek episode. We’ve tried to protect investors by keeping the Ageing Population theme as near as possible to a rock-bottom 5% of portfolio, the lowest we can go to in the GTI fund. We are nonetheless intrigued by this sector and the out and out bearish tone of our GTI adviser. We hope to interview him in New York in the next few weeks.
