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Chris Hill: Let's look ahead to 2013. What are some of the health-care stocks that are on your watch list?
David Williamson: I think the most interesting sector, which might not get enough attention, is Big Biotech. Big Pharma actually saw their valuations -- they were depressed. I think people took another look at them post-patent cliff.
Eli Lilly is a good example, which has nothing really in the immediate future to help bolster its pipeline. It's got two phase 3 drugs that are coming out soon, and a bunch of other stuff on the horizon. So Eli should be OK, but there's a little bit of a lull right now, where they're going to see declining revenues and not much else. But the stock's been bid up over the year because people like the overall story.
I think Big Biotech has been largely ignored. They don't pay dividends, except for Amgen, which has a smaller one, so income investors go more toward the Big Pharma players, but you look at these Big Biotechs, they're all doing really exciting things.
[Gilead Sciences] looks to be winning the hepatitis C race, Celgene has a number of interesting drugs. There's also [Biogen Idec], which has BG-12 -- really what's going to be the best-in-class MS drug. There's a lot of really compelling stories there, and they don't have the same generic threat.
Biosimilars are tricky to produce and then get approved, so even if their patent expires, there's not necessarily going to be generic competition lining up from Day One.
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