Large Cap vs SMID Cap Biotech ER
Can someone explain the huge differences between these two? Have a science background and am trying to recruit for ER roles. I would be happy with either, but think I prefer SMID cap given its a greater emphasis on the therapeutics aspect. Also is there a huge difference in pay for these roles the more senior you get? Do SMID cap teams recruit for non science people?
Bump
Take what I say with a grain of salt because I am no expert. Just trying to share what I know and if I am wrong somewhere, please point it out.
SMID companies are undercovered by Wall Street and are typically ones with a lot of growth potential.
A lot of times these SMID companies have interesting stories and disruptive products that lead to them being acquired by larger companies who pay a good premium.
ER teams at banks are not typically split by company size and are more so split by niche verticals. For example a team will cover med-tech diabetes related companies like Tandem, Insulet, Dexcom, and Abbot. Tandem is much smaller than the rest of them but since they all sort of operate in that diabetes market an ER team will cover it regardless of size.
Pay will vary by bank and bonuses are typically tied to performance. Recruiting wise it will depend on the bank and how they want to strategize their coverage so I’d maybe look for a bank that is looking to cover more of the biotech companies.
Good to know. I’ve heard recruiters say “oh he’s covering large cap biotech” or “oh his coverage is smid cap biotech names”
I understand that some analyst do oncology and others do neuroscience so there’s a mix of names, but I imagine all those guys are smid cap analyst given ABBV makes a variety of products that you can’t bucket into a sub sector.
Okay good to know thx! Maybe I got a bit to caught up in the science and need to realize this is a finance role to begin with…
You’re right though go with the larger cap analyst if it happens…
Bump, how does the exits differ between the two?
Define science background?
But some people are split between smid cap and large cap.
Large cap analyst are more finance focus fwiw. Their company’s value isn’t solely dependent on a singular read out.
Just resonating previous comments.
Large cap biotech/pharma teams usually cover your behemoths, think of Novartis, Abbvie, Merck, Lily, etc. The role is more finance driven given a data readout usually won’t move the needle.
SMID teams can cover some large cap names like Incyte, Beigine, etc. which have a few marketed products, but the gist of it is still science/event driven.
Btw, go for SMID cap.
Reason you say to go for smid cap?
To keep it simple:
- if ur less scientifically inclined, go large cap bio/pharma
- if u kinda smart and like digging into nitty gritty science, go smidcap
Smidcap more risk so naturally more reward. And goes without saying, more innovation. If u like the game, smid cap bio no doubt is the way
I cover Biotech on the buy-side and I enjoy covering the SMID cap names way more. There are some truly innovative names that can easily grow from a $1bn valuation to $50bn one day. The large names trade a lot more on incremental revenue and earnings beats and misses. The large cap work is where I assume you will find a lot more risk-neutral funds trying to arbitrage two names, while SMID cap is more about investing in the right pipeline over a longer time horizon.
From a sell-side career perspective, I am not sure if SMID or Large is better in Biotech. On one hand the large cap names receive more traffic, on the other you can be more differentiated on the SMID cap names.
I’m not hiring you without an MD/PhD. Why would I? If you want it bad enough put in the work.
Okay MS if you want but you’re still not getting hired without an MD or PhD…
Because having an MD/PhD does not mean you will be a good research analyst. There are plenty of research analysts with MD's or PhD's yet Akash Tewari is (deservedly) II's #1 ranked SMID cap analyst. However according to you, he should never have been hired as a biotech SS associate....
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