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Kirsten Bischoff, Opalesque New York: Michael Krensavage, former pharmaceutical analyst at Raymond James, will put his value investing philosophy to work as he launches a L/S fund focused on the pharmaceutical/medical products sector this summer. Krensavage, who as an analyst was notably been referred to “as a huge moneymaker” for hedge funds such as Origin Capital Management (Source), is currently laying the groundwork for the fund’s launch and took some time to speak with Opalesque about pharmaceutical investing.

Analyzing value, seeking the pipeline for free One of the influences on many of the investors looking to the pharmaceutical industry is what Krensavage refers to as the “oil well mentality”. Pharmaceutical pipelines and drugs in development tend to receive a volatile combination of excess press coverage and excited word of mouth regarding the discovery of the next “miracle drug”. It is an atmosphere which serves to raise the hopes many people have about finding the next big thing and they tend to invest with the hopes of riding the wave of a single drug’s success. “This is the basic psychology that plays to my advantage,” Krensavage notes.

“Where people fantasize about hitting the gusher, I look to buy after the oil field has been abandoned and where there are still untapped reserves.”

Krensavage’s strategy......................

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