Investment Opportunities in Biotechnology

Wednesday 13 September 2023


Author: Maha Khan Phillips

Christian Koch is on the portfolio management team at BB Biotech, the Swiss-based investment company. For CFA UK’s ‘In Conversation Podcast’, Koch talked to Maha Khan Phillips about innovations in the world of biotechnology, and the opportunities it presents for investors.

The world of biotechnology is rapidly changing, offering real opportunities for new treatments, said Chris Koch, during CFA UK’s In Conversation podcast. Koch talked about developments across different therapeutic areas - such as genetic medicines - as real drivers for new treatments.

He highlighted RNA based therapeutics, for example, and the now - post-pandemic – much discussed mRNA technology. “On the other side, we have technology such as gene therapies commonly utilising viral vectors, and a next iteration or next step beyond that is gene editing,” he said.

This can have implications for a range of diseases. “There’s so many of these smaller patient populations with severe disease where we know the disease driver and we could modulate,” he said. 

Koch pointed out that while the pandemic was a catalyst for biotechnology advancement, innovation did not happen in a vacuum. “The precedent of the developments that were necessary had happened in the last ten years or so, so everything was in place to then conduct these trials at such an unparalleled speed and scope,” he said.

New Vaccines

He believes the technology behind Covid vaccines bodes well for other vaccine developments. “One development is that Moderna and BioNTech, in collaboration with Pfizer, that these companies are pushing forward with large other trials and respiratory virus vaccines, but also trying to develop vaccines for viral diseases that weren’t accessible until now, where the technology itself is actually enabling the production of these vaccines.”

He highlighted examples such as personalised cancer vaccinations, and went on to discuss the personalisation of cancer treatments more broadly. “What we are really talking about is taking an individual tumour out, sequencing it, predicting the new antigens, building a vaccine, recording those mutations onto an RNA, and then injecting that into a patient while giving the standard of care.”
Koch also highlighted innovations in the world of obesity treatments. “That space has basically been revolutionised over the last decade.” Whilst in previous decades, various obesity treatments supported body weight reductions of 5% and 10%, there are now treatments that support 15% to 20% reductions. “And suddenly this now has the efficacy that we would need to actually help people lose a lot of weight and then move on to diet and lifestyle interventions to support that weight loss,” he said.

Implications for Investors

Koch acknowledged that many biotechnology companies are being squeezed, finding it difficult to find capital with increased interest rates and a changing market environment. “A lot of them had to restructure, especially smaller and mid-cap companies. They’re looking for alternative sources of capital, streamlining their operations, prioritising their pipeline. So that change has already occurred and is already occurring,” he said.

Koch was optimistic about the future. “We’ve seen a couple of deals not peak at the level that we were used to. We hope that’s going to pick up based on [what] valuations have been.” 
Big Pharma still has a lot of capital or cash left to spend, and they need to spend it, he said. “They need to because significant parts of their pipeline will go over the patent cliff over the next ten years.”




Christian Koch Portfolio Manager & Equity Analyst, BB Biotech



Related Articles

Sep 2023 » Investments

The ascent of primary research

Sep 2023 » Climate Change

Are hedge funds stepping up on climate transition?

Aug 2023 » Investments

Value for money: a more holistic approach is needed

Aug 2023 » Investments

The path to regulation for digital assets