Having just returned from San Francisco, James Douglas, Healthcare Fund Manager, Polar Capital comments on the 5 key themes in the global healthcare industry:

1. Fundamentals appear strong
The general atmosphere in the US during my last visit, to one of the largest gatherings of healthcare professions globally, showed that fundamentals in the healthcare industry appear to be strong. The biotechnology and pharmaceutical industries appear to be optimistic about their growth prospects and pipelines, the medical device companies are continuing to enjoy innovation-driven momentum and the end-markets in the life sciences and tools industry are in rude health.

2. Greater focus on China
China has been an important growth engine for the healthcare industry for some time but there does appear to be a greater focus on the region at present. For example, the capital equipment and consumables that are manufactured by the life science and tools sector are aligned with a number of the Government investment plans. In terms of the bio-pharmaceuticals industry, there appears to be a more supportive regulatory environment, not just approval timelines but also reimbursement. An important factor, not just for patients, but for accelerated commercialisation of therapies.

3. Innovation is accelerating
The pace of innovation in the healthcare sector appears to be accelerating, not just in therapeutics, but also medical devices and technology-driven services. On the drug side, areas such as oncology and targeted cancer agents or gene and cell therapies are progressing at a fast pace.  On the devices side, diabetes is  an area that is seeing a significant amount of innovation as the industry strives to help patients manage their disease.

4. US election didn't feature as much
Given 2020 is an election year in the US, and given politics and the regulatory environment are an important part of our due diligence, it was surprising how little airtime US politics got.  What did feature, however, were the topics of affordability and access to care. The need to deliver differentiated medicines that meet high unmet needs remains paramount, but we are seeing some behavioural changes, especially with the biotechnology and pharmaceutical companies. The industry is responding to the challenges of high drug prices in the US in areas like diabetes, asthma and HIV by offering low-cost solutions. Further, it also feels that volume, as opposed to price, will be the primary top-line driver for the drug industry in the near to medium term.

5. Continued consolidation is likely
With strong balance sheets and a fragmented industry, we believe consolidation will continue to be a theme in the healthcare industry. Timing is obviously impossible to predict, but we do believe the sector will continue to look for external sources of growth and opportunities to build scale and generate efficiencies.