D.A. Wallach

Big Pharma is increasingly buying early-stage assets from China (30-40% of acquisitions vs. single digits previously). Clinical trials in China are significantly cheaper and faster. China has successfully built a biotech infrastructure that is now integrating into the global supply chain. As US/EU firms outsource early development to China for speed/cost, Chinese biotech firms become prime M&A targets or dominant players in early-stage discovery. LONG. This is a contrarian play on Chinese innovation capabilities rather than just consumer demand. Geopolitical tensions; regulatory changes regarding data acceptance (though currently improving); US restrictions on Chinese biotech.

Global balance sheets have expanded 5x over 60 years, largely driven by asset price inflation and corporate profits. Corporate profits are being structurally supported by government deficits (Govt borrows -> pays entitlements -> recipients spend at Corps). This cycle supports real assets and equities over cash. LONG. Real assets and equities are the hedge against the "deficit-profit" loop. Fiscal austerity (unlikely); major recession curbing consumer spending.

Global balance sheets have expanded 5x over 60 years, largely driven by asset price inflation and corporate profits. Corporate profits are being structurally supported by government deficits (Govt borrows -> pays entitlements -> recipients spend at Corps). This cycle supports real assets and equities over cash. LONG. Real assets and equities are the hedge against the "deficit-profit" loop. Fiscal austerity (unlikely); major recession curbing consumer spending.