How to invest in biotechnology: the healthcare sector’s high-growth area

Dr Mike Tubbs provides an overview of this thriving industry, whose latest triumphs include the Covid-19 vaccines. He examines the best investment strategies and highlights his favourite picks.

Man doing science things
Anti-diabetic treatments are the sector’s second-biggest sellers
(Image credit: © Amgen)

Biotechnology is a vast field – and a lucrative one for investors. It is concerned with harnessing biomolecular processes (involving lipids, cells, nucleic acid and proteins) to develop technologies and products. Over the last few decades the sector has revolutionised drug development, agriculture and aspects of green energy.

Early investors in biotech companies have done very well. Shares in Amgen (a large drug maker), for instance, have soared by a factor of 170 over the last 31 years; Genus – a UK animal-genetics group – is up 54-fold in the last two decades.

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Dr Mike Tubbs

Highly qualified (BSc PhD CPhys FInstP MIoD) expert in R&D management, business improvement and investment analysis, Dr Mike Tubbs worked for decades on the 'inside' of corporate giants such as Xerox, Battelle and Lucas. Working in the research and development departments, he learnt what became the key to his investing; knowledge which gave him a unique perspective on the stock markets.

Dr Tubbs went on to create the R&D Scorecard which was presented annually to the Department of Trade & Industry and the European Commission. It was a guide for European businesses on how to improve prospects using correctly applied research and development. He has been a contributor to MoneyWeek for many years, with a particular focus on R&D-driven growth companies.