No end in sight for the semiconductor revolution
January 30, 2019
American Funds video transcript: “Advances in global biotech offer exciting
Will McKenna: We've just described a lot of headwinds and crosscurrents out there in these markets, but where do you feel the excitement about some of the opportunities? Are there some companies you can talk about that help bring that to life?
Rob Lovelace: Well, let me start with a group of companies, which is the whole biotech area. And we really do invest them in a basket sense; we tend to invest in five or six different companies. And I'd say the most exciting opportunities right now are very much focused on cancer treatments and these sorts of personalized treatments as well, where people are able to actually — based on your body chemistry — give you treatments that work for it. And there's just so much excitement in it, and it's not just U.S.-driven.
I was recently in Copenhagen, and it's just amazing to see these sort of centers of excellence that have developed around the world, usually a combination of educational institutions and strong private sector. In the case of Copenhagen, it was Novo Nordisk, an insulin company. But you just have so many doctors there doing amazing things and thinking about delivery systems. And they tend to have offices in the U.S., and they travel back and forth. So, all these little companies know each other. And the major drug companies — Lilly, Merck and others — have really become the distribution arms, although they're specializing, too, either in diabetes drugs or cancer or other areas of focus.
But it really does look like over the next several years, absolutely groundbreaking, long-term treatments — not really outright cures for these types of diseases — but we are seeing in hepatitis and others some actual cures that have been developed recently because of the genetics work that's been done, because of the understanding of the DNA chains and these delivery mechanisms that they've come up with that are so powerful. And every day we have an exciting breakthrough, and every other day we have a failure of a test. And so this is why I'm super reluctant to name specific companies, because it could be literally next week that one has a stage-three drug that fails.
So, you've got to invest in a basket here. But when I think about what's going to drive the economy over the next decade — and it's why I highlighted my excitement about the U.S. and Europe in particular (the Chinese are coming along in this area) — but still, this is where some really interesting work is being done. This is absolutely going to be a key thing that's going to change our lives and create wealth where there was none before.
Will McKenna: It's an incredible thing. I mean, the cure for cancer was always almost said as a joke or a science fiction kind of idea when we were younger. But clearly we're —
Rob Lovelace: Well, at least, I guess you're always a survivor as opposed to ever being cured. But really having quality-of-life improvement and a lot less debilitating treatments to get you from here to there.
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