20 BARRON’S September 28, 2020
shared their favorite investment ideas,
a mix of familiar health-care names
and lesser-known start-ups, some of
which came public only this year. Our
panelists also highlighted a handful of
private companies worth watching as
the sector continues to innovate and
transform.
There is much to mourn about our
current predicament, but there is also
much to celebrate, as our roundtable
experts remind us in the edited
conversation that follows.
Barron’s: How has the coronavirus
pandemic changed your investment
or analytical process?
Geoffrey Porges: We have spent a lot
of time trying to figure out whether
drug companies will make any profit
from Covid-19 treatments or vaccines.
The investment community has swung
from thinking the virus would be a
windfall for pharma and biotech
companies to more or less discounting
the expected value of Covid vaccines
and therapeutics. Companies like
Gilead Sciences [ticker: GILD], for
example, have seen their shares round-
trip. I don’t think we have ever had a
more challenging forecasting assign-
ment because we don’t know who the
buyers of these products will be, what
the prices will be, what the competitive
landscape will look like, and even
whether the products will work.
Other than that, it’s a piece of cake!
Porges: Some things have come into
focus. We’re about halfway through
understanding the therapeutics part of
Covid, but the vaccine piece remains
mostly unknown. It is difficult to think
about how investors will react to the
development of a vaccine, and how
much value will be reflected in the
stocks. You want to be invested ahead
of the early news, and then maybe out
of the stocks by the time the vaccines
are approved.
Eli Casdin: We invest in companies
that provide technologies to the life-
science industry, and therapies and
diagnostics that address cancer,
neurodegenerative disorders, and rare
diseases. The value proposition of these
companies hasn’t changed due to
Covid; in fact, people are beginning to
appreciate the industry’s contributions
even more. We spent time in March
and April thinking about how each of
our businesses would be disrupted,
recognizing the difficulty of getting
patients in for testing and clinical trials,
and how sales reps would get in to see
customers. Some of these businesses
saw a 50% to 70% reduction in
volumes, and many trials were delayed.
But you can’t put off essential services
and tests, and now things are starting
to come back online. For Casdin
Capital, Covid didn’t throw our
business off; if anything, it sped up the
investment train.
Abbie Celniker: In some cases,
companies that had developed
molecules for other indications
repurposed them to treat Covid. That
added to their value proposition. One
of our companies is working on an
antifibrosis drug that might have the
ability to block the complications of
respiratory-distress syndrome
common in people who die from Covid.
We’re reviewing existing opportunities
to see whether they might work in
Portrait illustrations
byMICHAEL HOEWELER
Geoffrey Porges
AbbVie
ABBV
$85.
FibroGen
FGEN
$42.
Prices as of 9/24/
Source: FactSet