AI in Pharma Publicly Traded Companies
Deep Pharma Intelligence (DPI) is a leading UK-based strategic and investment intelligence agency focused on emerging markets in the Pharmaceutical, Biotech, MedTech, and Healthcare tech industries.
DPI faces the colossal potential of Artificial Intelligence (AI) in the Pharmaceutical and Biotech Companies and expects significant industry growth in recent years.
Nowadays, only 13 companies of this industry are presented in the stock market and had $16.3 billion of market capitalization at the end of 2020, approximately thirteen times more than at the beginning of that year.
To simplify the investing in these companies, we present four different portfolios depends on the risk-averse and expected return of the potential investor.
Equal Parts Portfolio is the most straightforward representation of the average movement of the market. The principal fluctuation of this portfolio has been observed at the beginning of 2021. In January, Gritstone Oncology stocks skyrocketed after publishing positive results of their preclinical trials.
Capitalization Weight Portfolio represents the movement of the biggest companies in the market. Despite the high market interest of infamous players such as Berkeley Lights, Schrodinger, and Relay Therapeutics, their fluctuations can be made by speculators without significant organic growth. As a result, after a considerable increase in 2020, the decline in the value of Schrödinger and Relay Therapeutics' shares led to a general decline in portfolio growth.
Minimum Variance Portfolio presents the least risky approach to investing in AI in Pharma companies. This portfolio excluded Cotinga Therapeutics, and most of the stocks were issued by big companies. Compared with the Capitalization Weight Portfolio, greater diversification of small, fast-growing companies allowed to increase the return of this portfolio.
Sharpe Ratio Portfolio presents the most effective approach to investing in AI in Pharma companies. With the highest volatility of the stocks, it allows gathering the highest return to the investor. Affected by the fluctuation of small Cotinga Pharmaceuticals and the growth of big players such as Berkeley Lights and Sensyne Health, it allows getting high income without significant risks.
As you see, all these portfolios have significant rate return in the five months. Despite the decline of the portfolio rates at the beginning of 2021, most stock data providers and we give "Buy" and "Strong Buy" recommendations for most companies.