Healthcare is dominated by big pharma. – Is it really? Hi, I’m Alexandra Egg from Kieger.
What was a fact a decade ago has changed dramatically over time. As this chart shows, today, big pharma only accounts for around half of the largest healthcare companies.
So what happened? There are various reasons. One of them is bad governance. Two of the largest players 10 years ago, Bayer and Teva, both faced massive ESG-scandals, which decimated their market value and hurt their reputation and business outlook.
On the other hand, in areas such as Healthcare Services and Medtech we saw true scientific innovation combined with innovative business models that pushed those companies into the top 20.
We at Kieger focus on good governance and responsible, innovative business models, because we believe that it is the only way to achieve sustainable long-term returns.
We dare to prioritize sustainability. Because we dare to care.
Did you know that R&D expenses of the 15 biggest pharma companies have increased by almost 50% since 2016 to USD 133 bn in 2021? And expenses will continue to increase. Roche alone for example will spend close to CHF 15 bn on R&D in 2022, 1 bn more than in 2021.
We attended the ESMO (European Society for Medical Oncology) annual oncology congress in Paris from Sept. 9-13. We came away very positive from the meeting, though two souls remain in our chest. On one side we see the amazing potential and the opportunities for new oncology therapies. On the other side complexity seems to potentially increase and so does competition in the space. But what to do as an investor? Find some proposals in our ESMO Thoughts from the Street.
September is traditionally one of the most important conference months, as second quarter reporting is largely complete and third quarter reporting has not yet started. We attended the 19th annual Goldman Sachs European Medtech and HC Services Conference 2022, held in London on September 7-8, again in a physical setting. While we remain mindful of all the sector headwinds, we left the conference more convinced that there are selectively attractive investment opportunities at current levels.