Biotech Coverage

So I have a friend who’s in the process for a biotech analyst seat at a top notch fund (one of his top choices overall), but the catch is that he doesn’t have a scientific background. Has been stated that the PM is open to non-science backgrounds (clearly he’s getting the serious look in the process), but he’s concerned about getting pigeonholed into biotech for the rest of his career. Not averse to biotech in a vacuum, but concerned that the lack of scientific background is going to bite him and be career limiting him further down the road (while being pigeonholed). Anyone have any advice around biotech or switching industry coverage in general?

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Depending on the fund....he won't necessarily be pigeonholed.  There are alot of biotech funds that hold Large Cap Pharma and Commercial-stage biotech names.  Covering those companies isn't too different than covering any other sector.

The lack of scientific background can hinder him down the road in the sense that some potential employers won't even consider him bc of this (despite multiple years of experience).  That being said, there are a number of funds that wont care as long as you can demonstrate you can do good work.

 

Feel free to pm, but I feel some of the best biotech investors (PMs) are non science backgrounds. Really biotechs not that hard to understand especially if he’s decently smart. I’m an MD in biotech equities and half the time I feel as if science backgrounds purposefully make concepts difficult to understand. He just needs to hit the books and he’ll be fine.


Also fwiw this sector is a stock pickers dream playing binary events

 

Most funds won't care, particularly those focused on drugs in Phase 2 and beyond. Depending on where you go however, it does seem like there is an upper limit on getting PnL responsibility. Can't speak from personal experience on this latter point, just observations from two colleagues at biotech specialist fund 

 

I’ll say this as someone in a HF biopharma investment seat with just a BA in Biology:


There is a LOT of credentialism in this space. Sure, some funds will hire you without an MD/PhD, but that is maybe 25% of firms in a field where seats are already scarce. Last time I was laid off, it took me almost a year to find a new job. Think BA in a STEM field is the bare minimum. Without at least that, 90% of biopharma teams will not bother to interview.

I’ve also made peace with the fact that I will probably not be able to raise money for my own fund without an advanced degree… but I’m content with my career ceiling at my current firm.


Much less important for MedTech/Services though. Lots of people do not have life sciences backgrounds there.

 

Ehhh disagree tbh. If you went to a decent uni you can easily raise if you’re good. Again it’s just vanity. I’m an MD and it really hasn’t helped me one bit outside of knowing a diseases and mechanisms (not like other can’t look this up). PhDs know less about Medicine typically but could be strong in some stats or early drug discovery work.

Point is advanced degree is super overrated to do this job it’s just vanity. Most of the money at P72 / Citadel / millennium is non advanced degrees from my knowledge

 

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