The Misfits: West Pharmaceutical Services (WST)

The $27 billion heathcare supplier that few pay attention to.

The Sick Child, Edvard Munch, 1907, oil on canvas (Tate Museum)

Molecules dominate the world of healthcare investment coverage. Those companies discover and test new compounds and treatments to conquer the challenges of rare diseases or to improve outcomes from existing treatments (or, from a cynical approach, to discover new treatments before existing ones go off patent). Any generic search for “top healthcare stocks” will come up with the usual pharmaceutical suspects or a smorgasbord of startup companies on the precipice of a clinical trial result.

Not to take anything away from these companies. Many of them have been phenomenal investments. Some of them, less so.

What makes these investments better reading material and more interesting to write about is there is a good story to tell and follow. A financial writer can look at the pipeline of potential molecules that could lead to a breakthrough treatment. For unprofitable companies, you can follow cash burn or the runway they have until their product makes it to market. You can track when products go off patent and the potential lost revenue when it happens.

All in all, the quest for new molecules makes for compelling drama.

What I’m more interested in, though, is the wider universe of healthcare investments that have proven to be just as lucrative but don’t have the compelling narrative that make them a great read.

One of those less-covered-but-equally-lucrative investments in the healthcare space is West Pharmaceutical Services. It may not create the molecules, but it is just as important to the progress of medicine. It also happens to have generated a 65,660% return since its IPO in 1968.

Let’s dig in.

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