BTG is a specialist health-care company that focuses on antidotes, cancer treatment, and research. It gets most of its revenue from teaming up with and licensing drugs to larger companies like Pfizer, Johnson & Johnson and Sanofi, so a surprisingly strong performance from this division is good news.
As a health-care research and development company like BTG is only as good as its pipeline, it is also good to see a few products nearing the end of the regulatory process. Varisolve, a drug to treat varicose veins, and PRECISION Beads, a cancer treatment delivery device, could both be on the market relatively soon. Additionally, two of BTG's partners are advancing drugs through the regulatory hurdles in both the U.S. and Europe. Results from a key study that will determine the viability of a partnership with AstraZeneca are expected later this year, as well.
All this is good news, but with a price-to-earnings ratio over 90, BTG needs the good news to continue rolling in. Any stumble would likely send the shares well down, as we recently saw with Shire when a regulator opened the door for competition for Adderall XR, its second-biggest seller.
Such is the world of small, specialty pharmaceutical developers -- boom or bust can come on the back of a single product. Investors looking for a less dramatic way to invest in the interesting field of health care might consider one of the giants like GlaxoSmithKline or AstraZeneca. This is Neil Woodford's preferred approach, and in fact 16% of his funds is invested in these two shares.
If you'd like to learn about some of the other shares Woodford finds attractive, download this free Fool report now.
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Nate does not own any of the companies mentioned in this article. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Pfizer. Motley Fool newsletter services have recommended creating a diagonal call position in Johnson & Johnson. The Motley Fool has a disclosure policy.
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