Category Archives: Financial Firm

Highland Capital is Big on Healthcare Stocks this Year

Michael Gregory, who works for a unit of Highland Capital Management, said that the healthcare sector could experience a huge rebound in 2017. Last year, his picks on the stock market helped to almost triple returns of the S&P 500 Index.

 

The unit that he oversees manages a portfolio worth about $55 million. Gregory oversees the fund in conjunction with the co-founder and president of Highland Capital Management, James Dondero.

 

2016 Was Great

 

According to Gregory, the credit competency of Highland helped it make valuable investments within the energy sector in 2016 when oil prices bottomed. The investments were responsible for about half of the fund’s returns in the year.

 

According to Gregory, the two main investments of the year were SemGroup Corp. and Energy Transfer Equity LP ETE. Both of them gained almost 100% for the fund in 2016, something that rarely happens in the investment world.

 

Health Care was Not Great

 

In 2016, the only S&P 500 Index sector that did not perform well was the health care sector. Returns were minus 2.1% for most investors. However, Gregory was confident of a rebound in 2017.

 

When Gregory was asked about the stock in healthcare that he thinks will perform well, he took a moment to mention the opioid addiction that was sweeping across America. He said that insurance firms were now fast tracking the process of approving less-addictive pain medication. Gregory then proceeded to mention Pacira Pharmaceuticals Inc. and Collegium Pharmaceutical Inc. These were two companies, which were working towards the development of non-addictive pain medication.

 

Collegium’s approach was focused on the development of Xtampza ER, which was a medication that combines oxycodone with waxes and fatty acids to form small beads that are put in capsules. The aim is to make it difficult for someone attempting to abuse the medication by concentration. Estimates claim that about 200 million Americans can access this medication.

 

Pacira’s approach has been to develop Exparel. The medication is a non-opioid pain medication that is used for soft-tissue surgery. Patients are injected with the medication during an operation. Thus far, the company is making about $200 million in sales.