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Sample Track Record

Quotes from published research notes, positions from tactical model portfolio

Short US Biotech Index (IBB) - July 2015 to July 2016 + 30%

'No sector has seen the appetite for rapid innovative growth re-rate like biotech; the NASDAQ Biotech Index is now up 30% YTD, on the back of an M&A boom and positive drug trial results; the sector is up almost 6x since the current S&P rally began in March 2009. A current price/cash flow multiple on the sector of 34x (50x for pure biotech) reflects overoptimistic aggregate revenue hopes for high priced new niche drugs. Indeed, when global oncology drug sales were sub $80bn last year, it looks financially impossible for the US healthcare system to fund the $200-300bn in implied costs for the flood of newly approved biotech drugs, mostly focused on extending the life of cancer patients by 6-12mths . At a time when US healthcare inflation has finally been brought under control, the aggregate revenue expectations of the biotech sector over the next few years look hugely implausible.'  July 24th 2015