179. Why COVID has been a genuine catalyst for positive change in the healthcare industry

James Douglas and Gareth Powell, co-managers of the Polar Capital Global Healthcare Investment Trust, talk us through the improvements in the healthcare industry as a result of the COVID-19 pandemic. The pair also discuss how the sector has responded to rising inflation and its ability to make further gains in the future. They also evaluate the recent challenges faced by some of the COVID winners in the healthcare space and why the likes of Moderna can still make gains in the future. The pair also analyse the potential for M&A activity to be the catalyst for a pick-up in undervalued small and mid-cap healthcare companies.
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This is a unique trust investing in a very specialist part of the stock market. The Polar Capital Global Healthcare Trust principally invests in four sub-sectors: pharmaceuticals, biotechnology, medical technology and healthcare services. The portfolio is split into two segments: growth and innovation with a circa 90/10 split. The growth element is made up of predominantly larger companies, whereas the innovation pot will invest into medium and smaller companies that have the potential for greater growth in the long run.

What’s covered in this episode:

  • How the COVID-19 pandemic has resulted in improvements in the healthcare industry
  • Why there is still value in the likes of Moderna and other “COVID winners” despite their recent share price falls
  • Why the healthcare sector is better equipped to handle rising inflation than many of its peers – and why it will perform when inflation slows
  • Why we should not expect anything “far reaching” on drug pricing from the Biden administration in the next 6-12 months
  • The potential for a big pick-up in demand for MedTech, medical devices and healthcare supplies post COVID.
  • Why small and mid-sized healthcare companies look attractive and the potential for a pick-up in M&A activity in this space
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