Healthcare
27 Feb 15
Perhaps the most significant of the current trends in healthcare is the wave of new product innovation, particularly in therapeutics.
Perhaps the most significant of the current trends in healthcare is the wave of new product innovation, particularly in therapeutics.
This current innovation cycle in therapeutics is seemingly unprecedented in its strength, driven by biotech companies harvesting the fruits of advances in medical science over the past decade. The most significant of these scientific advances is the mapping of the human genome. This has allowed drug companies to identify the genetic causes of various diseases and to develop medicines specifically targeted at those areas.
Biotech companies have been the primary beneficiaries of this new wave of drug development. The four largest global biotech companies, all of which were essentially start-up businesses in the 1990s, now have a combined market capitalisation of close to $450bn and are expected to generate free cash flows in excess of $150bn over the next 5 years.
Immuno–oncology, the development of drugs that harness the body’s immune system to treat cancer, also deserves a special mention as it is arguably the most exciting part of new product innovation. Many healthcare investment specialists have commented this is the most exciting medical development they have seen in their careers. This could be the beginning of a paradigm shift in the treatment of cancer. Immuno-oncology will result in a move away from using toxins and towards using the body’s own immune system to control cancer, in the same way it would control other infectious agents such as bacteria and viruses.
