Backdoor AI Beneficiary Yields 8.8%, Trades at 13% Discount

Core Insights - The article discusses the transformative impact of AI on the pharmaceutical industry, particularly in drug development timelines and profitability [1][3][12] - It highlights the potential for significant returns from investments in companies benefiting from accelerated drug development cycles, specifically mentioning an 8.8% dividend yield from BlackRock Health Sciences Term Trust (BMEZ) [5][4] Industry Overview - AI is expected to reduce drug development time from the traditional 10-15 years to approximately 3-6 years, enhancing monopoly pricing periods for pharmaceutical companies [2][3] - The faster drug discovery process will lead to an increase in viable drug candidates entering trials, resulting in more approved medications and improved cash flow for these companies [4][12] Company Focus - BMEZ is a closed-end fund that invests in companies directly benefiting from advancements in pharmaceutical research and development, particularly those utilizing AI [5][8] - Alnylam Pharmaceuticals, a top holding of BMEZ, specializes in RNA interference therapies and is positioned to leverage AI for faster and more effective research outcomes [8][9] Market Dynamics - BMEZ currently trades at a 13% discount to its net asset value (NAV), presenting a buying opportunity given the strong fundamentals of the sector [5][7] - The article notes that despite recent regulatory challenges and market sentiment against drug developers, the political landscape is shifting favorably for pharmaceutical companies, allowing for longer patents and expedited review processes [10][11][12]