Last week, we asked you to vote in Motley Fool CAPS for the company that you think will be the best drug stock to own in 2007. Our crack team of health-care experts made strong cases for some of the most well-known names in the industry, such as Pfizer
I think that's quite a strong field, and I'm sure it wasn't easy for you to pick just one company as your top pick for the year. However, now that the dust has cleared, I can't say I'm surprised that the largest biotech company in the world, Genentech
It's in the DNA
Genentech has always been a highly regarded biotech company, and it has certainly done well for investors. The company's share price has gone up nearly fivefold in the past four and a half years. That kind of performance will certainly make a company popular with investors.
Fool writer Stephen Albainy-Jenei made some great points in his case for Genentech. First, the company has been named one of the Top 100 places to work by Fortune magazine. That's crucial for a research-based enterprise, because the company needs to attract and retain the best research scientists to keep creating new products. Second, Genentech's products are biologic drugs, which basically means they do not face the same competitive threat from generic drugs that the products of pharmaceutical companies like Pfizer and Glaxo do.
Many CAPS investors offered their thoughts on Genentech, including DNAbythebay, who wrote:
"Past scientific performance IS a predictor of future performance. Novel therapies for unmet medical needs is a winning strategy for market share leading products and high margins."
That's a sentiment I certainly agree with.
Genentech is a great success story. I certainly admire what the company has accomplished over the past 30 years, growing from a tiny start-up in a brand-new industry to a $93 billion giant. It rose to this position by making important new drugs that offered real advances to patients who desperately needed new therapeutic options.
The company's significant accomplishments give rise to new challenges, though. In 2007, the company will burst through the $10 billion annual sales barrier. That's a level that very few drug companies will ever attain, and it will not be easy for Genentech to continue growing at robust rates forever. That said, Genentech's management has always been very smart about how it goes about building the company's drug portfolio, so I expect it will make some good moves in the coming years.
I love a good contest, and a worthy company was crowned the champ here. Even though the voting is over, you can still make your opinions heard, along with more than 20,000 other investors on Motley Fool CAPS. Simply follow this link to your free registration.