The conflict in the Ukraine is the first war in a fully interconnected world, wired more closely than ever before by trade, supply chains and financial markets. As such, while the drama is occurring within Ukraine’s frontiers, the consequences of Putin’s “special military operation” are being felt across the globe. The US (and pending European) decision to ban Russian oil imports has fueled the commodity rally, playing into worries over global supplies and heightening stagflation concerns. Central banks, however, are still intent on normalising policy. The Fed has initiated its tightening cycle with a 25 bps hike and signaled six further increases in 2022, for what would be the most aggressive policy campaign in decades. And an announcement regarding balance sheet reduction could come as soon as May.
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.