Episode summary
The Quality Growth Playbook for Biotech | David Ferreiro
The Acquirers Podcast
· · Hosts: Tobias Carlisle, Jake Taylor · Guests: David Ferreiro
Summary
David Ferreiro frames Times Square Capital Management as a small- and mid-cap, long-only boutique that now runs SMA, mutual fund, CIT, and ETF vehicles, and says his own process is best described as quality growth rather than momentum. He looks for companies with sustainable competitive advantages, strong and consistent growth, and high-quality management teams, then works back to valuation through upside, downside, and base-case price targets rather than starting with price.
A large part of the conversation focuses on how that framework applies to biotech. Ferreiro argues that his team stays away from the earliest, most speculative names and prefers later-stage or commercial-stage businesses with proof of concept, recurring revenue, and a real fallback if the pipeline disappoints. He uses Mirum Pharmaceuticals as an example of a company with a growing commercial franchise, rare-disease assets, and additional shots on goal that could drive upside without making the stock a pure binary bet.
He also explains why biotech can stay mispriced: rare-disease patient populations can be underestimated, clinical outcomes remain unpredictable, and regulatory and commercial risks compound. On AI, Ferreiro is optimistic about faster molecule design and better patient selection, but says the evidence so far is stronger on preclinical efficiency and phase 1 to phase 2 success than on improving the harder phase 2 to phase 3 biology. He ends by noting that the sector’s attractiveness often depends on valuation, with some adjacent healthcare areas looking more compelling than biotech at the time.
Key takeaways
- Ferreiro says Times Square Capital is a quality-growth shop that starts with business quality and management, then applies valuation discipline through price targets.
- He prefers later-stage biotech with commercial revenue and proof of concept, not preclinical or purely binary names.
- On Mirum Pharmaceuticals, Ferreiro says the market is undervaluing both the commercial business and the pipeline, including rare liver disease programs.
- Ferreiro thinks AI is helping drug discovery efficiency and patient selection, but has not yet materially improved phase 2 to phase 3 success rates.
- He sizes commercial-stage biotech much larger than earlier-stage binary bets, often making the former a top-10 position.
- Ferreiro says valuation opportunities may be more attractive in some medtech names than in biotech at the moment.
Notable quotes
“We look for companies that have a sustainable competitive advantage um and that come in the form of proprietary products”
“we are uh not momentum chasers. So we're really you know fundamentally driven really stick to our process”
“we start at like the phase 2 stage. So we're thinking about companies that are a little bit past like the early stage developmental risk”
“Biology is inherently unpredictable and you really don't know what's going what's going to work”
“what we've seen so far is like real efficiency on being able to design molecules faster um but not really um you know a real impact on biology”
How the episode opens
And we're live. This is Value After Hours. I'm Tobias Carile, joined as always by my co-host Jake Taylor. Our special guest today is David Ferrerero. He is uh the small cap portfolio manager and healthcare analyst at Times Square Capital Management. Welcome Dave. How are you?
Good. Thanks. Thanks for having me.
So tell us a little bit first of all about what is Times Square Capital Management. Yeah, we're we're a small cap to midcap uh boutique asset manager long only. Uh we've been around for more than 25 years.
Um the firm's a partnership model. We have um three flagship strategies that focus on small midcap in the US and then another international small cap product. Those are our three biggest strategies.
Um we're a vehicle agnostic firm. So we really cater our clients. Uh we have both SMAs and mutual funds.
And more recently, we've seen a lot of great growth in our CIT offerings and we launched our first ETF this year, which is a concentrated version of our midcap fund.
And uh tell us a little bit about you describe yourself as quality growth and growth with a conscience. That was one of the things that I was most interested in hearing. How do you how do you define that?
Yeah, so it's a good question. So, um uh we say we're quality growth uh because one, we do focus on growth. Uh so we look for companies that are growing and uh and our process really um highlights certain type of companies.
We look for companies that have a sustainable competitive advantage um and that come in the form of proprietary products, you know, a manufacturing a distribution edge, barriers to entries, um you know, maybe no competition in the markets that they're in, intellectual property modes.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- biotech investment
- interest rates and biotech
- ai in drug development
- clinical trial costs
- portfolio management
Companies and tickers mentioned
- RVMD
- Revolution Medicines
- Acquirers Funds
Watch the episode
Watch “The Quality Growth Playbook for Biotech | David Ferreiro” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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The Acquirers Podcast, this episode and its artwork belong to Tobias Carlisle. Octagon is not affiliated with the show; this page is an independent summary.
