Biotech's shifting innovation will continue to refocus sector

Industry poses inherent risks

Host of companies with maturing business models generating significant amounts of cash, says Artisan Partners' Mark Yockey

Investors are right to carefully scrutinise the biotech industry. After a strong, multi-year run, average P/E multiples are high relative to other sectors.  Further, the industry poses inherent risks, particularly when investing in early stage companies whose future earnings may hinge the success of an initial pipeline drug. But focusing on the industry's riskiest segments overlooks a host of companies with maturing business models generating significant amounts of cash. In fact, relative to their future earnings growth potential, we are finding several large-cap US biotechs are mo...