Fortunes made in the lab
Biotech is an exotic asset class, evoking images of vials and white lab coats. This image parallels the complexity of the subject matter, which lies far beyond the comprehension of the lay investor. For most of us, investing in biotech betrays the tenets of legendary investor Warren Buffett, who preaches the importance of understanding what you’re investing in. “Buy a stock the way you would buy a house,” he says. “Understand and like it such that you’d be content to own it in the absence of any market.”
But there is another side to this coin.
Avoiding biotech altogether means missing out on attractive returns. CSL is a case in point. Had you invested $10,000 in CSL at its initial public offering in 1994, you’d be sitting on more than $1.2 million pre-tax.
Investors face a conundrum:
