Hello everyone, Im a 22 year old who has a M.S. in biomedical engineering and have been in the medical device industry for a little over a year. I have recently been browsing along the web in order to attain some information about getting into biotech equity research, however, its been rather difficult to find answers to the many questions I have. Any help would be much appreciated! I feel completely lost in terms of how to break into biotech equity research and I was hoping to attain some guidance… such as: 1)what are some research firms that would have entry level positions available (specifically in biotech). I’m in southern california, however, im willing to relocate anywhere. 2) Do I need to be in the process of acquiring a charter, or could I still apply for an associate position? 3.) My undergrad was also in biomedical engineering, so I dont have a strong finance background (besides what i’ve picked up along the way), what are some crucial skills I should build before applying? I’m currently auditing a corporate finance course, so hopefully it will be informative… I was considering an MBA, however, im really tired of school and I just recently learned about the CFA and it seems like it will be a strong attribute. Point me in the right direction please! and once again, any advice/pointers would be much appreciated, even if it isnt directed towards any of the posed questions… Thanks
Covering medical devices is very different from biotech, assuming we’re not talking about the large caps. If you’re looking at small- and mid-cap biotech, you’re going to spend a lot of time going through clinical literature and trial data, as many of these companies are not generating operating profits or positive cash flows and you’re basically more or less speculating on whether certain drugs will hit key milestones like FDA approval and so forth. On the medical device side, as you probably know, there’s some importance placed on clinical trials, but not to the extent as you’d see on the biotech side and so covering device companies will involve focusing on other stuff like its operating model, sales and marketing initiatives, competitive landscape, etc. You can basically think of the device side as being more financial modeling intensive, and biotech being more science intensive. I guess it really depends what interests you more, but I would seriously consider working on the device side or large-cap biotech because the finance skills are much more transferable. Even most biotech analysts will tell you that their financial models for the smaller biotech firms are more or less pointless. For your other questions, I think the CFA program will be helpful, as the job market is so choppy right now and you should do whatever it takes to prove your understanding of finance. If you don’t have a strong finance background it stands to reason that you should really do something about it. Hope this helps.
Ad This is really good advice from Numi. Smaller biotech comanies often need deep pockets of cash and patient informed investors who understand the sector with long time horizons who maybe more interested in the application of the science than the specific commercial return of that investment. These tend to be VC plays looking for home-runs, though I admit I’m looking at this from more of VC perspective … I would add that you should try and get as close as you reasonably can to any kind of strategic corporate activity in the medical device company you are currently employed in. If you are currently some sort of egghead-boffin who is working on the latest membrane of some drug eluting stent or other then this maybe difficult … depends on the size of your company. And the willingness of the numbers guys to include you. It might sound a bit trite and contrived but maybe you could start by gathering all the available financial info on your company (shouldn’t be too hard) and then do some comparisons with competitors / similar companies in the med. device sector and then the wider biotech world. This would at least allow you to talk the same language with any of your corporate venturing guys (if you have any) or the executive. Beware: offering to be bag-carrier is not without risk i.e. annoying your techy boss. On a different track - you could target very small biotech/med. devices/pharma companies that are germinating in your local research uni’s / facilities / science parks. Or at least hear them present at any kind of open funding events. My final $0.02 - Doing the CFA is a good way or working out whether you actually like working with financials … Best of British whatever happens Loxley
Loxley – great suggestions. Nice to hear from you again. What have you been up to these days? It doesn’t seem like you come around here too often, so I was wondering if we could keep in touch via email. Mind dropping me a line at [porcupines AT gmail DOT com]?
Thanks numi and Loxley for the advice…In regards to career opportunities, I stumbled upon an associate position at majestic research… anybody have any input about this firm? Also, going back to the first question, are there any other research firms that you would suggest I look into? Once again, I really appreciate the help, as I really don’t have anyone else to talk to in regards to gaining some insight of the equity research field… And if anyone else has any suggestions, please feel free to chime in!
you need more finance background before you’ll be considered, imho. knock at least level I out of the way and you’ll have a better chance. realistically, level II before you’ll be in contension for a research gig. and you need to have pretty decent writing skills as well…
Needham & Co.
check out jmp securities
great…Im really at a crossroads right now, as I am deciding whether or not to try to find a position as an equity research assistant while preparing for the CFA and possible series 7, or to stay at the med. device company that i’m currently working for while preparing for my CFA. I guess i’m just curious whether or not it would be advisable to gain more experience in the healthcare industry or if I should try to get into an assistant position beginning this summer (so that I could learn more about finance)… any suggestions ?
Your industry knowledge becomes incrementally valuable as you move higher up, and right now, most firms out there are not actively recruiting for research. If you can land a gig in equity research, go for it, but don’t fool yourself into thinking that it’s an easy move at the moment. Best thing is to ramp up on your financial knowledge as much as you can, and if you do intend to stick with your device company for a while, you should try to spend time critically thinking about how investors look at your company. I don’t know what company you’re working at, but within the walls of your office, you have the opportunity to get a better perspective on your business than almost anyone on Wall Street. You should be figuring out answers to questions like the following: -How does your company compete with other device manufacturers? -How does your company estimate market opportunities and competitive dynamics? -What barriers to entry exist in the markets where your products compete? -What is the reimbursement environment for your products, and how much are they at risk for pricing pressure going forward? -Is there anything that your company does that is unique, or are all the devices relatively commoditized or undifferentiated? -What is your company’s sales and distribution strategy, and how does this model compare with that of competing firms? -How can your company increase product utilization among existing customers? -Does your company grow earnings primarily through top-line expansion or manufacturing efficiencies? -What drives sales growth (e.g. new customer adds, increased utilization, more competitive pricing, greater overall unit sales)? -How does your company think about R&D? How do you value product candidates in your pipeline? -What types of relationships does your company have with physicians, and how are they trained on your products? -How has your company gained share from competitors, and what tactics have worked and what have not? -Have you identified any vertical or horizontal synergies with other companies in the device space? Would your company be an attractive acquisition target, and why or why not? -What are the strengths and weaknesses of your company’s management? Anyway, I’m sure there a million other questions you can ask, but those are the kinds of questions that matter to investors that cover the healthcare space. You should get into the habit of coming up with questions on your own so you can learn how to think like an investor yourself. If you can get yourself in the habit of critically analyze your company from the inside out and figure out the issues that really matter, you’re well on your way to improving your chances of getting into the investment industry. I hope this helps…and for anyone else who’s read this, hopefully you find some use in my posting because I think it is quite transferable to other industries besides healthcare as well.
Have you been posting about this topic on wallstreetoasis? Just curious if you are the same guy.
Thank you numi…and no joemontana, this is my first posting… but ill be sure to check that forum out as well lol…
The bank I work for has hired some doctors for investment banking associate positions.