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Our Top 2 Picks Within Immuno-Oncology

Damien Conover, CFA

Damien Conover: Immuno-oncology is a major shift in the development for new drugs. In the past decades, we haven't seen a lot of advancements in new cancer drugs. But with immuno-oncology we're seeing new drugs offer patients much longer survival times--tripling, sometimes quadrupling the amount of years that they have left to live. And these drugs are really transformative causing a paradigm shift in the way to treat cancer patients. It's really across most cancers, and even some of the most prevalent ones, like lung cancer, we're seeing patients be able to rapidly progress their survival benefits from these drugs.

Now, when we think about which firms are best positioned here--Merck, Bristol, Pfizer, Roche--these all have strong immuno-oncology drugs. Now, the recommendation we're making is Bristol-Myers. Bristol-Myers is the most focused in this therapeutic area and in our view, one of the most undervalued. Another company that we think is well-positioned in immuno-oncology is Roche. Roche has a focus in several types of drugs but also well-positioned within immuno-oncology. It has a strong diversification that should enable a little bit more steady cash flows and we think is underappreciated by the investment community. 

So, as we see immuno-oncology drugs really transform the lives of patients, we think it's also a really good opportunity to take a look at investing and invest in Bristol and Roche.