Meirav Chovav
Salomon Smith Barney
Report Card
1* Overall rank
1* Rank by institutions
21* Rank by stock picking
Makes money for me
Saves me from disaster
Makes me think
Tells the truth
Meaningful service, not overkill
*Out of 27.
Best star rating is 3 stars. Click here for our methodology.
1st Place


B.S., M.S., University of Rochester M.B.A., Rensselaer Polytechnic Institute. Chovav has been a biotech analyst at Salomon Smith Barney since 1992. She also has four years of laboratory experience in molecular biology and genetic engineering.

Industry Outlook and Style

Biotech stocks have taken a roller-coaster ride in recent months. Although the sector is up 61% for the 12 months ending Aug. 4, the stocks peaked in February. They lost one-third of their value by April but had made up most of that until recent turbulence again sent prices lower.

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Investors who listened to Meirav Chovav were prepared for the turns: In February, just as the sector topped out, she warned in an interview with Ha'aretz, an Israeli paper, that this was "a market of momentum" and that "momentum is a worrisome thing." (She downgraded three names in January.) The sector's March and April bloodletting vindicated Chovav's fears. (Ha'aretz and are partners in an Israeli technology and financial news site,

With valuations again rich, she notes that "these stocks have been very volatile, but the volatility has had little to do with market fundamentals and more to do with market sentiment -- whether tech is in favor, the volatility of the Nasdaq, momentum players coming in and out of the stocks frequently."

What's a biotech investor to do? "Stick with the leading players, the best-quality companies," says Chovav, who notes that fundamentals for the group are improving. More companies are profitable, and there are more products on the market than ever before.

Chovav has a reputation for skepticism about her companies' projections of future revenue.

The Salomon analyst builds her models for predicting future revenue on a pragmatic foundation that she dubs "the four P's": patients, physicians, payers and populations. Important trends affecting these variables include patients' use of the Internet for information about treatments (this can drive patient demand for a new drug) and the growth of health-maintenance organizations. HMOs have put enormous cost pressure on hospitals, making hospital drugs a tough sell.

The stocks Chovav likes best include the two-largest players, Amgen (AMGN - Get Report) and Genentech ( DNA), as well as IDEC Pharmaceuticals Corp. ( IDPH). She anticipates strong revenue and earnings-per-share growth for all three.

Amgen, the maker of top-selling anemia drug Epogen and cancer drug Neupogen, has several products in the pipeline. She expects four or five to be approved by the Food and Drug Administration in the next two years. (See our related story.) Chovav also foresees a September victory in Amgen's lawsuit against tiny Transkaryotics Therapies ( TKTX). (Amgen charges the company with patent infringement of Epogen.)

Genentech has a wide range of products on the market, with more in the works. Products on the market now include Herceptin, for breast cancer, and Rituxan, for B-cell non-Hodgkin's lymphoma. Chovav expects both drugs to continue selling well. She says that the company has "proven itself in terms of innovation and new-product development."

IDEC, which comarkets Rituxan with Genentech, has Zevalin in clinical trials. Zevalin is used to treat aggressive forms of lymphomas that are resistant to existing therapies. IDEC is expected to file for FDA approval for the drug later this year. It has four other products in the pipeline, Chovav says. Salomon Smith Barney has no investment banking relationships with Amgen, Genentech or IDEC.

One of the stocks Chovav downgraded in January was Biogen ( BGEN). She remains concerned that sales of Avonex, its only drug on the market, are slowing.

Adding to Biogen's woes, Chiron Corp. ( CHIR) and Schering AG have sued the company over royalties they allege are owed them from the process Biogen used to make the drug, which treats multiple sclerosis. (Chiron and Schering jointly manufacture competing multiple sclerosis drug Betaseron.) Biogen posted strong second-quarter earnings but is down 17% in the last 12 months, while Genentech and Amgen are up 136% and 75%, respectively, over the same period.

Chovav doesn't cover many names in the much-ballyhooed genomics field. One exception is Orchid BioSciences ( ORCH), which performs SNP, or "snip," analysis of genetic samples. (Orchid's technology searches for minute aberrations in DNA sequences.) Chovav likes the company, noting that several big-name players have signed on, including Affymetrix ( AFFX) and PE Biosystems ( PEB - Get Report). Salomon was a co-manager of Orchid's IPO. (See our story on the genomics field.)

Institutional investors in's Analyst Rankings -- Equity 2000 reserve mostly high praise for Chovav. One says that she "speaks her mind and is usually right" and that she "knows the science well." Another rates her a "good stock picker." Yet a third voter says that while the Salomon analyst "knows a lot," she is "perhaps a bit too optimistic on the companies she likes -- this is a volatile industry."

Stock Pick
Favorite stock for next 12 months:
"Our current price target is $100, but Amgen is involved with litigation that we believe the company will win. Once it does so, we believe the price target could go way up. We think the case could be over by September. So we see major upside to that stock."

Rate Their Stock Picks:

Which stock do you like best? Chovav and To: Amgen Ho*: MedImmune

*Chovav and To each gave us their top stock pick for the next 12 months. Ho gave us her top pick for the year 2000.