Two equivalent forces – internal and external – are expected to generate both challenges and opportunities for the health sciences industry over the next few years.

From an internal perspective, escalating health care costs will continue to be problematic for employers and individuals: Health debt is responsible for half of involuntary bankruptcies, and 1.5 million individuals are added to the ranks of the uninsured annually as employers drop health coverage.

External drivers will be evidenced by continued economic distress, government policy changes emanating from recent elections, increased demands for transparency, and the integration of non-traditional players into the health care ecosystem.

We divide the health sciences industry into four main areas: pharmaceutical companies, health care services companies, products and devices providers, and biotechnology firms.

We use fundamental, bottom-up analysis that seeks to identify high-quality companies and the most compelling investment opportunities. In general, we follow a growth investment strategy, seeking companies whose earnings are expected to grow faster than inflation and the economy in general. When stock valuations seem unusually high, however, a “value” approach will be adhered to.

We also look for special situations that we believe could increase in value for a variety of reasons, including a change in management, an extraordinary corporate event,