How smart can a pen be² ?

Pens are no longer used only for writing in the healthcare sector. And some pens have become smarter.

Innovative medical devices such as a smart, reusable insulin pen² is improving the quality of life for patients with diabetes. It’s a pen that offers quick and relatively painless injections, can calculate and track doses as well as provide reminders, alerts and reports. When connected to a smartphone app, the pen could also help diabetics better monitor their blood sugar levels, diet and exercise. The data on the pen could also help doctors and patients make optimial treatment decisions.

Additionally, some healthcare companies are using data science and artificial intelligence for new medicines and timely diagnosis. Such breakthrough in treatments and innovative technologies are presenting long-term growth opportunities in the healthcare sector.

Investing in healthcare - same, same but different¹

• What hasn’t changed. Long-term structural themes such as innovation, demographics, mergers & acquisitions as well as rising demand in emerging markets have remained intact in the healthcare industry. Such trends have continued to bolster the earnings profile, valuations and alpha-generating opportunities of some healthcare companies.
  
  
• What has changed. Since the onset of the global public health crisis, investor interest in the healthcare sector has been on the rise, alongside public debate over the efficacy of vaccines used in the treatment of infectious diseases. The industry has also seen some breakthroughs in treatments with the increased use of innovative technologies.
  
  

What to keep in mind

A digital transformation of healthcare is taking place across all members of the Organization for Economic Co-operation and Development (OECD) grouping, accelerated by the public health crisis and driven up by digitisation of IT infrastructure as well as growing demand from patients³. Additionally, a rapid rise in demand among emerging markets could help accelerate the sector’s long-term growth.

Forward P/E of US healthcare sectors and the S&P 500⁴

Governments and companies have accelerated investments in healthcare, including sub-sectors such as innovative medical technologies, biotechnology, pharmaceuticals and new medical devices and services. As illustrated in the chart⁴, these various healthcare sub-sectors, where valuation remains relatively attractive, are presenting long-term growth opportunities.

Conclusion
 

The global public health crisis has brought healthcare to the forefront, presenting long-term growth opportunities in sub-sectors such as innovative medical technologies, biotechnology, pharmaceuticals as well as new medical devices and services. Additionally, the growing middle class in emerging markets and an ageing population could help accelerate demand and the sector’s long-term growth.

Provided for information only based on market conditions as of date of publication, not to be construed as investment recommendation or advice.

Diversification does not guarantee investment return and does not eliminate the risk of loss.

1. For illustrative purposes only based on current market conditions, subject to change from time to time. Not all investments are suitable for all investors. Exact allocation of portfolio depends on each individual’s circumstance and market conditions.
2. Source: “What is a smart insulin pen?”, American Diabetes Association. As of November 2021.
3. Source: “Health at a Glance 2021: OECD Indicators”, Organisation for Economic Co-operation and Development, 09.11.2021.
4. Source: J.P. Morgan Asset Management’s chart based on data from Bloomberg between 04.01.2013 and 30.09.2021. Forward price-to-earnings (P/E) is next 12 months.

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