A Capital-Efficient Prescription For New Drugs: Raghuram 'Ram' Selvaraju

Nov. 01, 2012 4:52 PM ETBLRX, AMPE, SGYP-OLD, IRWD3 Comments
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Life Sciences Report

The small biotech companies that have survived the last five years have learned to be lean, mean and efficient with shareholder capital. In this exclusive interview with The Life Sciences Report, Aegis Capital's Managing Director and Head of Equity Research Raghuram "Ram" Selvaraju discusses companies that have mitigated risk by giving new life and higher margins to products previously relegated to the dustbin of commoditized generics. He also highlights some very new and exciting developments in the realm of stem cell technologies and monoclonal antibodies that engage never-before-targeted molecules.

The Life Sciences Report: You just returned from the 28th Annual European Conference on Treatment and Research in Multiple Sclerosis in Lyon, France. Putting aside the focus on multiple sclerosis, did you get any perspective on biotech markets in general?

Raghuram Selvaraju: Right now, everyone is talking about the major cost-containment pressures at work in the healthcare industry, and in Europe in particular, where a lot of economies are in deep financial trouble. Companies are concerned about the prospects of new drug launches. Once new drugs get through the approval process, they then have to go in front of reimbursement agencies in Europe. They are looking for advantageous pricing, but nowadays companies have to be prepared for a contentious battle, which was not historically the case. That has put a damper on enthusiasm within the context of the overall sector.

There are also concerns here in the U.S. about cost-containment pressures because we have a fiscal cliff looming. If Congress can't figure out how to put the country on a sustainable fiscal path, we will see draconian, automatically imposed cuts across the board within healthcare. These cutbacks will not only impact funding for research and clinical development, but will also affect the ability of the healthcare system to pay for drugs and other diagnostic and therapeutic interventions.

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The Life Sciences Report features leading investment coverage of the life sciences sector, including biotechnology, pharmaceuticals, tools & diagnostics, and medical devices. A Streetwise Reports publication. www.TheLifeSciencesReport.com

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