Popular biotech boosters getting multimillion-dollar payouts on Wall Street as top analysts are wooed with big offers — WSJ
If you’re one of those Wall Street analysts who enjoys nothing quite as much as building a fire of anticipation under a biotech stock, your day has arrived.
The Wall Street Journal today managed to track some of the big paydays awaiting the biotech analysts who have been jumping ship from one bank group to another. And there are three investment banks that are making some offers that are all but impossible to refuse: Leerink Partners, Cantor Fitzgerald and Jefferies Group.
The new pay rate here: $3 million to $4 million a year. And that has Morgan Stanley and others paying more to retain their top players.
On the Journal’s list is Andrew Berens, who went from Morgan Stanley to Leerink; sources say that Alethia Young joined Cantor from Credit Suisse Group; while Jefferies “hired Michael Yee away from RBC Capital Markets at an annual compensation of $4 million, the people say.”
After the dot-com bust, new rules prohibited analysts from soliciting deals to avoid repeating the same kind of excessive hype that wiped out many investors at the time. Now, though, the WSJ suggests there may be a wee bit of pressure on the analysts to go all out to cheer on a company — helping the deal team — which might explain why some of these analysts are known for their rah-rah support with frequent buy recommendations and “uneven” results.
Interesting statistic from the WSJ story on biotech analysts this morning.
76% of all recommendations by biotech analysts are buy ratings, compared with 56% for other industries.
— Brad Loncar (@bradloncar) August 29, 2018