Current public market environment and equity investor views
Global and European healthcare investors were generally optimistic feeling that money invested into the life sciences industry and biotech in particular is coming to fruition suggesting that we’re heading towards clinical and scientific heights of success that are not reflected in company valuations right now. Therefore, it will be important to identify technology that will survive and compete as the industry moves ever faster.
Small caps look compelling apart from a few platform companies. Large caps are mixed, and the shares will depend on M&A as overall investor sentiment towards large healthcare companies is perhaps the worst it has been for 10 years because of pricing pressure, the regulatory framework and upheaval in the US healthcare system. The healthcare industry could have done a better PR job for itself. European companies are generally trading at material discounts to US peers of similar quality and seen as an investment opportunity. European science was also seen as very high quality and competitive with US science.
Technologies on the horizon to be excited by include: CAR-T, gene therapy, CRISPR, next generation kinase inhibitors and smarter clinical trial design as well as the second and third generation waves of immune-oncology. One investor said, “it’s all about immunology”.
Therapies for neurological conditions such as Alzheimer’s and aging-related diseases (other than cosmetic products like Botox) were subject to some scepticism owing to a string of clinical data with more & more failures which inform the basic scientific research but to date haven’t progressed knowledge of how to effect clinical benefit further. But there was an overall desire for some successes in this field and investors were watching [and hopeful] for the next big clinical milestones coming though.