Health Care – Pharmaceuticals/Speciality: 2012 First

Providing “very detailed work on the various international operations of the companies he covers,” as one portfolio manager puts it, helps Aaron (Ronny) Gal of Sanford C. Bernstein & Co. take the lead for a fourth straight year. Although pharmaceuticals lagged the broad market’s 11.8 percent advance by 3.6 percentage points in the first eight months of the year, Gal is optimistic. “I do expect some recovery in the next 12 months, driven by financial results in the generic group and strong pricing in the branded group,” he says. The 45-year-old analyst, who follows nine names, added coverage of Theravance in September 2011 with an outperform rating, at $20.45, because he expected positive results from Phase 3 clinical trials of two drugs that the San Francisco–based company is developing in partnership with London-based multinational GlaxoSmithKline: Relovair and UMEC/VI, which are used in the treatment of asthma and chronic obstructive pulmonary disease. In mid-July, after Theravance shares had soared 55 percent, to $31.69, and shot past the sector by 33.3 percentage points, Gal downgraded them to market perform, primarily on valuation. By the end of August, the stock had tumbled 15.8 percent, to $26.67, while the sector slipped just 1.6 percent.