Passion. Integrity. Results. Food for Food for Bulls: Fear… Bulls: Fear… And Hope! And Hope! October 2019
Confidence is Low (Good News!) Confidence is Low (Good News!) State Str State Street Investor Confi Investor Confidenc ence Index,1 Index,1999 – 99 – 2019 BofAML B&B Ind BofAML B&B Indicator (scale 0 cator (scale 0 to 1 to 10) Mid Price 80.1 140 High on 03/31/00 139.3 Average 108.1 130 Los on 03/29/19 71.2 120 110 100 90 80.1 70 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Cumulati Cumul tive F ve Fund Flows 2 nd Flows 2019 350 $339bn Cu Cumu mulative fu fund flo flows ($bn) s ($bn) 10 Actual 300 Backtest Extreme Global Equities 9 250 Bull Global Govt & Corp Bonds 8 200 150 7 100 6 50 5 0 3 -50 2 -100 Extreme 1 Bear -150 0 -200 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 ’18 ‘20 -$208bn -$208bn Source: BofA Merrill Lynch Global Investment Strategy -250 Jan’19 Feb’19 Mar’19 Apr’19 May’19 Jun’19 Jul’19 Aug’19 Sep’19 Oct’19 Nov’19 Source: BofAML Global Investment Strategy, EPFR Global Passion. Integrity. Results. 2
$10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 Source: Bloomberg L.P. Risk A Risk Aversion Evident in V $- Dec-89 Aug-90 Apr-91 Dec-91 Aug-92 ersion Evident in Valuation Apr-93 Dec-93 Aug-94 Earnings Yield S&P 500 Earning Apr-95 Dec-95 Aug-96 Apr-97 Yield S&P 500 and 1 Dec-97 Aug-98 Amount Equities to Earn$1 Ap-99 Dec-99 Aug-00 Apr-01 Dec-01 and 10-Year T Aug-02 luation Apr-03 Dec-03 3 Aug-04 ear Treasur Apr-05 Amount Bonds to Earn $1 Dec-05 Aug-06 easury Yield, 1 Apr-07 Dec-07 Aug-08 Yield, 1989-2 Apr-09 Dec-09 Aug-10 Passion. Integrity. Results. Apr-11 Dec-11 Aug-12 -2019 Apr-12 Dec-13 Aug-14 Apr-15 Dec-15 Aug-16 Apr-17 Dec-17 Aug-18 Apr-19
Structural Bull Market Structural Bull Market 10000 8000 6000 4000 3006.79 2000 1000 800 600 400 200 100 80 60 40 20 Generational lows: Gener tional lows: 1942 942, 1 1974 & & 2 2009 10 8.00 6.00 4.00 1930-1939 1940-1949 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009 2010-2019 2020-2029 Source: BofA Merrill Lynch Global Research, Bloomberg Passion. Integrity. Results. 4
Angeles Angeles Private Capital Themes Private Capital Themes Emendo Emendo Biot Biotherap herapeutics ics PatientPing PatientPing Cerevel Cerevel Vera Whole Health Vera Whole Health Shearwater Health Shearwater Health FutuRx FutuRx Aspen Dental Aspen Dental Aktana Aktana Mitoconix Mitoconix Tisbury Pharmaceuticals Tisbu ry Pharmaceuticals PatientPop PatientPop HHAeXchan ange ge LogicBio Therapeutics LogicBio Therapeutics Impact Bio Impact Bio Groups Groups Potenus Potenus 89Bio 89Bio Alize Pharma Alize Pharma Novellu NovellusDX SteadyMed Therapeutics SteadyMed herapeutics Outcome Health Outcome Health Mobile ODT Mobile ODT Azura Azura Ophthalmics phthalmics Galecto Biotec Galecto Biotech U.S. Renal Care U.S. Renal Care MD VIP MD VIP FusMobile FusMobile Catalent Catalent MD Clone MD Clone Kyruus Kyruus Health Catalyst Health Catalys VetCor Professiona VetCor Professional Practices Practices LetsGetChecked LetsGetChecked Boston Health Economics Bost Health Economics Scientist Scientist Passion. Integrity. Results. 5
Or Orders of Magnitude Advances ders of Magnitude Advances $100,000,000 Moore’s Law $10,000,000 human genome genome $,000,000 one huma $100,000 sequencing one $10,000 $1,000 e of sequen Transition to “next-gen sequencing $100 Price of Pric $10 $1 Sept-01 Jun-02 Mar-03 Dec-03 Sep-04 Jun-05 Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10 Jun-11 Mar-12 Dec-12 Sep-13 Jun-14 Mar-15 Cost per Genome Cost per Genome Passion. Integrity. Results. 6
Large Market Opportunity Lar e Market Opportunity $6,000 New addressed di New addr essed diseases seases Total: tal: $3, $3,510bn. bn. $5 trillion TAM $60 $60 $5,000 in Genome s opportunity ($bn) y ($bn) $1,0 $1,070 medicine $4,000 $517 $517 $61 $61 $96 $96 sales oppor $32 $32 $45 $45 $3,000 $477 $477 $536 $536 $49 $49 Peak sal $5 $5 $185 $185 Peak $71 $71 $182 $182 $2,000 $1,1 $1,100 Currently addr Curren addressed di essed diseases seases Total: tal: $1, $1,330bn. bn. $408 $408 $1,000 Neuro Liver Blood Heart Muscular Eye Infections Cancer Lung 4000 120 VC investments 3500 100 in Genomics 3000 80 have tripled in 2500 US ($mm) US ($mm) 2000 past few years 60 1500 40 1000 20 500 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 VC Investments # of deals Source: CB Insights, Goldman Sachs Global Investment Research Passion. Integrity. Results. 7
Health Care Outpaces Health Car Outpaces 1600 S&P 500 Health Care Sector GICS Level 1 Index S&P 500 Index 1400 1200 1000 800 600 400 200 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source: Bloomberg L.P. Passion. Integrity. Results. 8
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