A revolution is upon us. Innovation in healthcare now ranks among the global economy’s most dynamic, fast-growing sectors. Artificial intelligence (AI), robotics and improved internet services – thanks to advances in Cloud computing and 5G wireless connectivity – are dramatically lowering costs. Covid-19 should give the healthcare innovation sector further impetus as efforts to alleviate this crisis and prevent future viral outbreaks intensify.
New diagnostic tools are making it easier and cheaper to identify and treat diseases. They are helping healthcare professionals to identify (or rule out) diseases such as coronavirus cases quickly. Such technological tools are also providing remote (virtual) care, stopping the virus spreading more widely. We expect the latest outbreak to lead to more investment and demand for online, or virtual, medical services (known as telemedicine or telehealth) as people seek to limit their interactions with hospitals.
Medical wearables will increasingly help in the fight against such epidemics too. They can enable doctors to monitor vital signs with far less contact and are particularly useful for taking temperatures, blood sugar levels, respiratory rates and pulse readings. This data can immediately be read and analysed by healthcare workers.
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AI and Big Data can accurately diagnose numerous diseases better than the average medical professional. This is particularly true in cases where staff have little experience in obscure diseases. Google is already investing heavily in this area. It has purchased anonymous patient records and late last year paid over $2bn for Fitbit, which makes gadgets to measure, among other things, steps walked per day and sleep quality.
One company set to benefit from this backdrop is Regeneron Pharmaceuticals (Nasdaq: REGN), a biotechnology group leading the race to develop a vaccine for Covid-19. Regeneron has identified hundreds of virus-neutralising antibodies and has been working on producing an antibody cocktail therapy on a large scale. Regeneron is one of the top two holdings in our exchange-traded fund (ETF).
The da Vinci of surgical robots
America’s Intuitive Surgical (Nasdaq: ISRG) develops, manufactures and markets surgical robotic products, most notably the da Vinci Surgical System.
This was one of the first robot-assisted, minimally invasive surgical systems cleared by the federal Food and Drug Administration. Today, a family of da Vinci systems is used by surgeons in all 50 US states and 66 countries around the world.
The global surgical-robots market is expected to grow by around 14% a year to $17bn by 2025. Higher demand for minimally invasive procedures should underpin this growth. Over one million surgeries were performed using da Vinci systems in 2018 alone. It is our fourth-largest holding.
A top biological engineer
Edwards Lifesciences (NYSE: EW) represents the key subtheme of biological engineering in our ETF. It is an American medical equipment company specialising in artificial heart valves. It is mostly known for a transcatheter aortic heart valve made of bovine tissue within a collapsible stainless-steel stent.
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