Analyst - Pharmaceutical Sector, do you need a (bio) science degree?

Hello fellow monkeys,

I have a question regarding Equity Research Analysts covering the pharmaceutical sector:

-Do you need a degree in biology, medicine - or any medical science related degrees, in order to cover such an industry?

-Is it possible for me, as I study a Finance degree, to be able work as an analyst in this sector?

I have read many research reports on pharmaceutical companies and there were many technical terms which are related to the medical science field and could not be grasped by any outsiders...

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Comments (21)

Feb 6, 2013 - 11:47am

no but it takes some time to grasp without a bio degree. Still - even bio students out of college will have a tough time comprehending everything as they study mostly theories and techniques of dead people whereas covering stocks is about being up to date on the newest technologies...

a science background is helpful, but understanding the business is really about understanding the process of approvals, improvement in resedarch techniques and basic understanding of drugs etc..

Feb 6, 2013 - 11:48am

interested as well.

We can't rely on anyone these days, we just have to do things ourselves don't we?

Feb 7, 2013 - 2:37am

The only incredible healthcare analyst I've ever met was a Doctor initially

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Feb 8, 2013 - 12:53pm

I previously worked for an analyst who covered healthcare-related consumer products at one point in his career. He worked as an associate covering a different industry and was asked to help grow the new group. He noted it took longer to learn the industry-specific language but it's certainly possible. While being familiar with specific processes may be helpful (i.e. required approval steps for a medical device to yield results for intended use), the company will translate most of this for you. It's the analysts job to understand more of the company's operations and less of the product development.

Look at it semiconductors. An analyst doesn't necessarily need to know how to build a chip or know what a transistor but the analyst should analyze production rates, ASPs and other industry metrics. For telecom, this could be ARPU and churn rates. For retail, this could be comp, traffic, promotional cadence, etc. Some are easier to understand than others because we may experience these in our daily lives, i.e. promotions from retailers. Others would require a deeper understanding or at least some exposure in the field.

I believe firms look for those who have a degree because it shows that the candidate has the capacity to understand the industry-specific dense terms or, at least, is passionate about the field. All in all, it's just harder to prove to a recruiter why you're more capable than someone who has proven knowledge.

Feb 8, 2013 - 12:54pm

Best degree for healthcare / biotech / pharma investing? (Originally Posted: 01/28/2014)

For someone who wants specialized knowledge of the industry (enough to be able to read clinical reports and have a good understanding of the technology / science background of the products), what is the optimal degree or education? I would assume undergraduate studies in bioengineering or the like - what about a masters degree? An MD seems too expensive and too unrelated to biotech to me.

Feb 8, 2013 - 12:56pm

Importance of a science degree for Healthcare ER (Originally Posted: 03/27/2014)

I was just wondering if anyone had any idea how important it is to have a science (Biology/Chemistry/Medicine) degree if you want to cover healthcare/pharmaceutical companies.

I've spoken to people at banks who have said that it's not important as it is more about the business element, in fact, one guy who did Economics interned on a Healthcare team.

But then, I've also heard of people who have had a masters/career background in science/medicine.

I'm guessing it is somewhat important because it would instill trust in your ability to analyse these companies.But how much of your degree would even cover the cutting-edge science and is it not something that can be learned on the job?

Feb 8, 2013 - 1:00pm

As a sell-side deal-making person who has done pharma deals, I think the important thing is the numbers. As your colleagues said, it's the business side that matters.

It helps to have the background knowledge and some companies like McKinsey (that produce horribly expensive pharma reports) target specifically grads with pharma academics. These consulting companies work with the buy-side, don't they? I can't remember, I mean ever, working with these specialist consultants.

From the sell-side perspective, we always rely on the buy-side to do more DD, to hire specialists and do more research before putting their money in the deal.

ER is about talking to people, right? When I was a student, I thought ER was about doing numbers and ratios, but there is no much of that.

Feb 8, 2013 - 1:01pm

R&D innovation is important for biopharma but not always the most cruicial - even big pharma companies regularly get slammed by the FDA for overlooking manufacturing. partnerships, taxes, M&A, financing are all equally important as an R&D pipeline for these businesses.

Also, most drugs and biotech solutions are pretty easy to understand if you took high school chemistry. The main thing about treatments you actually need to know aren't the chemical processes but really the consumer experience. cost of production, pricing power, effectiveness (measured in many diff ways), how strong people need it etc

Feb 8, 2013 - 1:02pm

Equity Research biotechnology (Originally Posted: 08/18/2008)

hi
I have a few questions about ER in biotechnology.

  • Does a PhD in Life sciences + MBA need CFA to progress in career?

  • Do you think It's an interesting job for a PhD in life sciences ? Skills in biology are really useful?

  • What is the typical salary for an analyst in a BB?

  • and my last question.. Can ER allow to break into VC ?

thank you very much

Feb 8, 2013 - 1:03pm
  • Does a PhD in Life sciences + MBA need CFA to progress in career?
    Unlikely.

  • Do you think It's an interesting job for a PhD in life sciences ?
    Stupid question. Is it an interesting job for you?

  • Skills in biology are really useful?
    Could be - if you have the knowledge to determine whether a new product works or not.

  • What is the typical salary for an analyst in a BB?
    How long is a piece of string. Do a search in this forum.

  • and my last question.. Can ER allow to break into VC ?
    No, it's illegal.

thank you very much
You're welcome.

Feb 8, 2013 - 1:07pm

Hi. I work in Biotech research, so I can give you honest answers

  • Does a PhD in Life sciences + MBA need CFA to progress in career?
    Yes, I will probably do this for a couple more years and then move to another industry.

  • Do you think It's an interesting job for a PhD in life sciences ? Skills in biology are really useful?

  • Yes, all the senior people are PhD's

  • What is the typical salary for an analyst in a BB?

  • and my last question.. Can ER allow to break into VC ?

  • Most people who leave, go into HF, but I assume that VC should be OK, too, depending on what firm you work for
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