Pharmaceuticals & Health Care

Biotechnology Peter Welford & team Nomura

second team Erica Whittaker & team BofA–Merrill Lynch

third team Stephen McGarry & team Goldman Sachs

runner-up Ravi Mehrotra & team Credit Suisse

This year’s top-ranked pair started 2008 at Lehman Brothers, moved to Nomura International in October after it acquired some of Lehman Brothers Holdings’ European operations and ended the year at Jefferies & Co. Through all the changes the two-analyst team, which advances from second place, continued to provide "indispensable insights," according to one client. Led by Peter Welford, the pair urged investors to buy Acambis in January, at 127.75p, calling the U.K.-based vaccine developer an attractive acquisition target. In July, France’s Sanofi-Aventis announced it would buy Acambis for 190.00p a share, representing a gain of 48.7 percent since the analysts’ recommendation. During the same period the sector gained just 4.5 percent. The acquisition was completed in September. Welford, 30, who earned a bachelor’s degree in chemistry at the University of Oxford in 2001, worked as a biotechnology analyst at Merrill Lynch before joining Lehman in 2006. Finishing in second place after having been unranked last year is the two-member Banc of America Securities–Merrill Lynch team directed by Erica Whittaker. Praised by one money manager for their "keen understanding of how clinical developments factor into fair valuations," the analysts told clients in October to buy Swiss biotech behemoth Actelion Pharmaceuticals, citing strong growth of its hypertension drug Tracleer. The stock had advanced 11.2 percent by year-end. Although falling two places, to third, the Goldman Sachs International duo guided by Stephen McGarry continues to impress investors with its "bearish convictions," according to one backer. The team initiated coverage of French arthritis drug developer NicOx in August with a sell recommendation, seeing little profit potential. Through December the stock was down 19.8 percent.

Medical Technologies & Services

Michael Jüngling & team BofA–Merrill Lynch

second team Hans Boström & team Goldman Sachs

third team Edward Ridley-Day & team Nomura

runner-up Thomas Jones J.P. Morgan

Michael Jüngling, 36, captains the six-strong Banc of America Securities–Merrill Lynch squad to a fifth straight appearance in the No. 1 spot. The team, with two analysts in London, three in New York and Jüngling dividing his time between the two cities, wins plaudits for providing integrated coverage of European and U.S. companies: "It’s vastly more efficient to make one call and get the big picture," observes one client. Seeing limited upside for Swiss implant manufacturers Sonova Holding and Straumann Holding, the team downgraded both stocks to underperform in June. By year-end they were trailing the sector by 10.4 and 12.4 percentage points, respectively. In second place for a fifth straight year is Hans Boström ’s two-analyst team at Goldman Sachs International, praised for "remaining attuned to the long-term cycle while staying alert to near-term alpha," in the words of one investor. In January 2008 the team upgraded Synthes to buy, at Sf136.50, on steady demand for the Swiss orthopedic-equipment manufacturer’s devices. The stock surged 15.6 percent, to Sf157.80, through mid-September before falling with the rest of the market; it ended the year at Sf133.40, down 2.3 percent but well ahead of the sector’s 26.1 percent plunge. Repeating in third place is the two-analyst team led by Edward Ridley-Day , which moved to Nomura International in October after it acquired some of Lehman Brothers Holdings’ European operations, then moved to Barclays Capital last month. Praised by one money manager for its "superlative sense of the factors that differentiate these stocks," the team downgraded Danish hearing-aid maker William Demant Holding to sell in January 2008, citing slowing demand. By year-end the stock had tumbled 43.7 percent.

Pharmaceuticals

Graham Parry & team BofA–Merrill Lynch

second team Johannah Walton, Matthew Weston & team Nomura

third team Kevin Wilson & team Citi

runners-up Mark Purcell & team Deutsche; Alexandra Hauber & team J.P. Morgan; Andrew Baum & team Morgan Stanley; Gbola Amusa & team UBS

Catapulting from third place, where they spent the past two years, is the three-analyst Banc of America Securities–Merrill Lynch squad, which makes its first visit to the top spot since 2000. The team, led by Graham Parry, provides "great insight into the drug industry," according to one buy-side enthusiast. In October the analysts upgraded France’s Sanofi-Aventis to buy, calling the stock a bargain at €40.88. The share price rose to €45.40 through December, a gain of 11.1 percent that bested the sector’s by 3.8 percentage points. Parry, 35, who earned a master’s degree in biochemistry at the University of Oxford in 1996, covered the pharmaceuticals sector for ABN Amro before joining Merrill in 2003. Last year’s top-ranked team, directed by Johannah Walton and Matthew Weston, started 2008 at Lehman Brothers, moved to Nomura International in October after it acquired some of Lehman Brothers Holdings’ European operations, then decamped to Credit Suisse last month. Although the five-strong team slips a notch to second place after five years at No. 1, the analysts continue to impress with what one investor calls "practically unimpeachable treatment of prescription numbers and how they translate into revenue." The team’s stock recommendations produced mixed results, however. In February 2008 the analysts downgraded Germany’s biggest drugmaker, Bayer, to neutral, on valuation. Two weeks later, with the stock down 8.6 percent, they upgraded it to overweight, again on valuation. It tumbled 16.2 percent further through December. Kevin Wilson guides his four-member Citi troupe from runner-up to third place. Applauded by one client for its "deep knowledge of pipelines and the nuts and bolts of drug development," the team upgraded AstraZeneca to buy in April, saying the Anglo-Swedish outfit’s cholesterol-lowering drug Crestor had unrecognized market potential. The stock had soared 39.4 percent by year-end.

Return to the Best Analysts of the Year

Return to the All-Europe Research Team Rankings