Innovation corners of the healthcare market continue to drive growth, says Anthony Ginsberg

Growth of the gene therapy and medical device markets are expected to contribute to continued growth for the healthcare sector, says Anthony Ginsberg, co-creator of the HAN-GINS Indxx Healthcare Innovation UCITS ETF (LON:WELL). Medical Devices remain the largest sub-theme in the ETF with a 56.84% weighting, followed by biological engineering and biotech at 23.17%, robotics (5.13%), neuroscience (6.68%), genome sequencing (5.53%), healthcare trackers (2.44%), bioinformatics (0.19%). A growing number of smaller medical device companies are amongst WELL’s leading contributors, in line with this subtheme enjoying a rerating boosted by the recent spike and resurgence of COVID cases across the US and Europe. On the biotech side, Regeneron’s 57% gain for the year was helped by President Trump using its new antibody treatment and a recent US$450m order from the US government, with the stock now the seventh largest holding in the ETF at 3.8%.  COVID-19 is speeding up the adoption of telemedicine, medical wearables, robotic surgeries and biotech, Ginsberg said.  Across the ETF’s 104 holdings the biggest gains have been in biotech, medical devices and gene editing, including Regeneron, Seegene, Livongo, Biogen, Exact Sciences, Illumina and BioNTech. “The healthcare industry is transforming in numerous ways, benefiting a number of innovative healthcare companies,” Ginsberg said. “There is an explosion of telehealth visits, a huge increase in remote inpatient consultations and family visits, growth in online scheduling and the automation of patient triage, and greater use of artificial intelligence to allocate resources and make clinical decisions. “Other areas of growth include supporting remote work and communication for team members, mobilising teams to create PPE (equipment) and ensuring connectivity at remote COVID-19 testing sites, together with expanding capacity.  All of this makes Healthcare Innovation one of the most exciting areas to invest.”  Gene therapy is expected to show a decade long market compound annual growth rate of 31.1%, according to a recent report from P&S Intelligence. “While the US is currently the largest region for this sector, some commentators say Asia-Pacific is expected to be the fastest growing region over the next decade.” In device manufacturers, he noted that COVID-19 supply constraints are providing a boom to medical device and product manufacturers, particularly those focused on PPE and devices related to the pandemic, such as gloves, masks, respirators, ventilators. Ginsberg and his team are also energised about telehealth, as US government Medicare insurance reimbursement rules have recently broadened to include various telehealth services, ensuring Medicare insurance will pay for virtual/remote diagnostics and care now, creating huge demand. Post-COVID, the team expects hospitals to shift a larger volume of patient care to telehealth and for digital health technologies to see accelerated adoption.