How to profit from an ageing population
Ageing populations could create an explosion in healthcare costs for society. But with new treatments, there are opportunities for canny investors
David Attenborough's 100th birthday highlighted our ageing population and the fact that we in the West are living longer and our populations are getting older.
While developments in medicine over the past 50 years have enabled us to live longer, we “haven't been as successful in finding ways to prolong healthy life”, says Harley Street wellness expert Aamer Khan.
It's now common for people to spend the last 15 years or more of their lives, around a fifth of their total lifespan, dealing with several chronic conditions at the same time.
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Fortunately, we're beginning to get better at understanding and tackling at least some of the worst of these conditions. Breakthrough drugs and therapies are “addressing unmet medical needs in ways not previously possible”, says Daniel Lyons, portfolio manager on the healthcare and biotech team at Janus Henderson.
Our ageing population is at an inflection point
This gap between lifespan and what Khan calls “healthspan” – the number of years of healthy living not marred by chronic conditions – isn't just a problem for those directly affected. It also imposes costs on society. “If you look at a chart of average health spending by age, it basically goes crazy from around 75 onwards, rising almost vertically,” says Gareth Powell, head of healthcare at Polar Capital. With the number of 75- to 80-year-olds set to explode as the baby boomers enter their sunset years, this could prove to be very expensive for society.
Douglas Williams, a senior executive and board member for several biotechnology companies, argues that we're at an “inflection point” – if we don't find some effective treatments for age-related conditions such as Alzheimer's soon, then the conditions “could end up bankrupting the global healthcare system”.
The effort to find effective therapies is complicated by the fact that the conditions don't tend to be caused by a single factor, but rather have multiple triggers. Different conditions can also have a knock-on effect on each other. So even for a single family of diseases, “there's never going to be one treatment for everyone”, says Kiren Baines-Mortimore, the CEO and founder of Valaya Bio, a biotechnology firm tackling age-related degenerative neurological diseases. Instead, we are probably going to have to develop combinations of treatments that exploit multiple biological mechanisms. Any treatment of conditions such dementia will “need to be done in a very measured and multi-disciplinary way”, says Tony Banerjee, the founder and CEO of HarleyDoc.
All this will pose fiscal challenges for governments and healthcare systems, but there is a silver lining for investors. The rise in the ageing population, combined with the complexity of caring for their health, presents an “enormous opportunity” for drug and biotechnology firms, says George Viney, co-manager of the Trojan Global Equity fund. “The value of treatments that can ensure people live in a healthy and independent way for longer and reduce the need to spend huge sums of money to treat people in hospitals, will be huge.”
The challenges in treating cardiovascular disease
“Perhaps the key reason why healthcare costs balloon from 75 or 80 onwards is to do with the increasing amount of cardiovascular disease in that age group,” says Powell. This represents a huge “unmet need”, but the good news is that there's been progress in developing better medical devices, such as those that help with atrial fibrillation or repair heart valves.
Progress has been slower when it comes to drugs because “it's so incredibly expensive to develop drugs for heart disease, as you have to do massive trials”, as Powell points out. Heart disease is classified by regulators as a chronic ailment, rather than an immediate threat to life, such as cancer, which means that regulators are much less tolerant of any side effects. Healthcare systems may also be reluctant to pay for the drugs. Research in this area has been hindered by the fact that patents on blockbuster drugs expire, lowering prices for patients, but making drug companies less interested in investing.
Yet Powell is optimistic that, after “dropping off the radar a bit”, interest in treating heart disease has begun to pick up again, and progress is being made. He points to the recent buzz around Lp(a), a type of cholesterol that has been linked to clotting, inflammation and the build-up of plaque in arteries. There is “strong evidence that people with Lp(a) have a higher risk of heart attacks” and several companies have had promising results from drugs that lower the levels of Lp(a) in the bloodstream.
Huge promise from weight-loss drugs
Another big contributor to problems with an ageing population is obesity, which in turn feeds into a number of other conditions, perhaps most obviously diabetes. Diabetes is one of the biggest areas of healthcare spending for the elderly, with £1 billion a year spent by the NHS on treating diabetic foot ulcers alone, says Khan. Diabetes is also associated with a much higher risk of Alzheimer's disease, “to the extent that some people call Alzheimer's type-3 diabetes”, says John Todd, professor of precision medicine at the University of Oxford. Obesity is also seen as a risk factor for other conditions that disproportionately affect the elderly, including heart disease and cancer.
Until recently, progress in finding effective lasting treatments for diabetes and obesity was slow. Over the past five years, however, it has become clear that GLP-1 receptor agonists, such as Wegovy and Mounjaro, are “the breakthrough that we have been waiting decades for”, says Todd. The long-term effects of these drugs are still not clear, but at the moment the benefits seem to “outweigh any risks”.
There is also evidence that they bring “phenomenal broad-based health benefits that go far beyond just losing weight or tackling diabetes”, says Powell. Studies show that Wegovy can lower general inflammation throughout the body, boosting cardiovascular health “beyond that which you'd normally expect given the weight loss”. Evonne Sepsis of ESC Advisors notes that GLP-1s can even help reduce problems with the central nervous system.
Progress in treating Alzheimer's
The disease most often associated with an ageing population is dementia and the majority of cases are caused by Alzheimer's. There is an increasing amount of evidence that the disease is primarily caused by the toxic build-up of particular proteins, such as amyloids, says Neil Ward, the vice-president of Pacific Biosciences. If these proteins aren't cleared adequately, they can cause damage to cells in the brain, including those responsible for repair and regeneration.
Genetic therapies may one day slow this process significantly. But in the short run diagnostic blood tests using the rogue proteins as biomarkers could transform the treatment of the disease, says Giovanna Lalli, the director of strategy and operations at the self-funded UK medical research organisation LifeArc. LifeArc's own test is due to finish trials in around 2028. If all goes well, this will do away with the need for the scans and lumbar punctures currently used to spot the disease, enabling quicker diagnosis and earlier intervention.
Early diagnosis will help, especially if drugs currently in development come to fruition. These show promise in helping the body expel the proteins, and in recent years two have been approved by the US regulator, the Food and Drug Administration (FDA).
They have shown only a limited impact on the disease so far and come with side effects, a result of the fact that the drugs do not easily reach the brain. However, trontinemab, developed by Roche, is in the late stages of clinical trials. It has been shown to be much better at crossing the blood-brain barrier, producing an “almost complete wipe-out of the amyloid plaques in a couple of months without major side effects”. Sepsis predicts similar progress in other disorders, such as Parkinson's, over the next decade.
The importance of a good night's sleep
One contributing factor that has been associated with Alzheimer's and dementia in general is poor sleep. Studies show a strong link between sleep problems and neurological disease. People who suffer from a lack of deep sleep in middle age are three times more likely to develop Alzheimer's, says Jane Rhodes, chief executive officer of biotechnology company AstronauTx.
This may be down to the fact that deep sleep is when memories are formed and when a process called “glymphatic flow” occurs, which “drives out all the metabolic waste that builds up during the day”, including the toxins and neurotoxic proteins that can build up and drive the development of diseases such as Alzheimer's and Parkinson's.
The amount of deep sleep you get declines with age, with elderly people sleeping only a fraction of the time that younger people do, which may explain why dementia and other conditions are more common in later life. Rhodes has high hopes for her company's drug, which she says will help “make everyone sleep like a 20-year-old”. It is due to enter clinical trials early next year.
Poor sleep in the middle-aged and elderly “could be the next obesity”, says Sepsis. The potential ramifications of treatments that improve the quality as well as the quantity of sleep could then be comparable to those of the GLP-1 weight-loss drugs. Given the “vast opportunity” for the sector that that represents, it's not surprising that from her work advising early-stage biotechnology companies, Sepsis has found that “there are definitely quite a few companies that have started to look at this area”.
Indeed, pharmaceutical giant Eli Lilly paid nearly $8 billion to get a foothold in the sleep treatments area by buying Centessa Pharmaceuticals. Current treatments are intended to help people fall asleep, rather than promoting the really important deep sleep, so there are big opportunities here, and they are not just limited to drugs. The solution to the sleep problem will entail a multi-pronged approach that includes improvements in diagnosis and the development of wearable technologies that measure how much good-quality sleep we're getting.
Boosting the immune system
Another source of problems in an ageing population is the weakening of the immune system. As we get older the number of viruses that we have encountered accumulates. This isn't usually a problem. In fact, it's generally seen as a good thing and is one of the main reasons why adults get fewer colds than children do. Some of the viruses we encounter, however, such as the one that causes shingles, can “reside in our brains in latent form for the rest of our lives”, says Todd. Sometimes they can get reactivated by other viruses, such as the herpes simplex (cold sore) virus, creating “neuronal damage, which can then cause or accelerate many of the cases of dementia, including Alzheimer's”.
An increasing number of studies show a strong link between vaccination for particular diseases and a reduced risk of dementia, says Todd. He points to a 2024 study that found that the shingles vaccine Shingrix increased the length of dementia-free lifespan by around 17%. Another study from 2025 found that giving people over the age of 60 the Arexvy vaccine, which protects against respiratory syncytial virus (RSV), cut the number of dementia diagnoses that they received over the next 18 months by a third. There is still a lot we don't know about how the immune system is involved in diseases such as dementia, but these studies show enormous promise for the future.
The best investments to play the theme
One of the companies at the forefront of the race to slow Alzheimer's is Eli Lilly (NYSE: LLY), which owns the only two drugs that have been approved to treat the condition, donanemab and lecanemab. It also has Mounjaro (tirzepatide), one of the major GLP-1s that have been shown to help people lose weight as well as tackle type-2diabetes and reduce general inflammation (including in the heart). It has recently developed lower-dose versions, as well as one that can taken orally. As stated in the main story, Eli Lilly has also recently moved into medicine for poor-quality sleep. Its revenue has more than doubled since 2020 and is expected to keep growing by around 15% a year, more than justifying the fact that it trades at 23 times 2027 earnings.
The other company that dominates the weight-loss market is Novo Nordisk (Copenhagen: NOVO.B), which makes Wegovy (semaglutide), the other major GLP-1 drug. As with Mounjaro, studies have shown that it can not only treat obesity – with recent studies suggesting that high-dose versions can help people shed more than a quarter of their weight – but also help a range of conditions, including cardiovascular ones. The firm also has a wide range of obesity and diabetes drugs in the pipeline. Sales are more than double the level they were in 2020 and earnings have tripled, yet the shares trade at only 14.2 times 2027 earnings and yield 3.8%.
Polar Capital's Gareth Powell is particularly keen on NewAmsterdam Pharma (Nasdaq: NAMS), which specialises in drugs that treat heart disease. The firm is currently losing money, making it a relatively risky bet, but it stands to make big gains if its flagship drug, obicetrapib, which is in late-stage clinical trials, is approved. Preliminary results suggest that it can lower levels of “bad” cholesterol, with some early indications that it could even be useful in certain patients at high risk of Alzheimer's by lowering the buildup of certain proteins linked with the disease.
Another small high-risk, high-reward drug company that specialises in heart disease is Cytokinetics (Nasdaq: CYTK). At the end of last year, its flagship drug aficamten was approved in the US for treating a particular type of cardiac disorder and was also given the green light in the EU and China. It is running additional late-stage clinical trials to see whether the drug could also be used for other heart patients. It has two other cardiac drugs, omecamtiv mecarbil and aficamten, in advanced trials, and is doing some interesting work aimed at treating neuromuscular disorders.
Daniel Lyons of Janus Henderson particularly likes medical technology company Boston Scientific (NYSE: BSX). It has a strong record of making devices that are “less invasive, easier for doctors to use and gentler on older patients”. Around two-thirds of the firm's revenue comes from cardiovascular devices, which improve blood flow, fix faulty heart rhythms and support the heart without the need for major surgery, which is especially helpful for the elderly. The firm's total sales have more than doubled since 2020 and continue to growth strongly, yet the stock trades at only 14 times 2027 earnings.
Gene-sequencing company PacBio (Nasdaq: PACB) is involved in the quest to find the genetic and epigenetic causes of ageing. It recently won a contract to sequence genomes for the Long Life Family Study being carried out by the National Institute on Ageing. It will track families with a history of long-lived ancestors over multiple generations to try to identify the causes of long life. PacBio has also won other large-scale contracts and its management expects the firm to become profitable in late 2027 or early 2028.
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