Innovation is accelerating at every level: the US Food and Drug Administration (FDA) has approved almost 50% more new drugs in 2023 than in 2022, putting it back on track.
Out of ten thousand drug candidates, only one is likely to produce a drug approved by the FDA. This often represents one to two decades of lost time, as well as many millions or billions of dollars in losses.
This surge in FDA approvals is one of the consequences of the improved relationship between pharmaceutical companies and the FDA in recent years. The legal framework is now more flexible, and FDA programmes aim to facilitate the development and speed up the approval of drugs that treat serious diseases or meet unmet medical needs.
Another reason for this trend is technology. Shooting blind is no longer a viable plan for drug discovery. That's why researchers need numerical predictive models to predict, before any physical testing, whether a drug is a good candidate.
AI is a good example of the upheaval that can occur in healthcare: it has revolutionised innovative methods of data collection, biosimulation and early diagnosis of diseases for clinical trials.
We believe that this endorsement trend is sustainable if we take into account the significant funding for early-stage research, the number of companies created, the advances made in genetic sequencing, artificial intelligence and others.
Of course AI is having a major impact on the sector, but other types of technological innovation will enable us to take a fresh look at major issues such as infectious diseases, chronic diseases, obesity, etc.
At Groupama AM, we believe that future champions in healthcare will also be champions of innovation.
The international equity management team
In biotechnology, many companies stand out for their ability to tackle challenges that are both highly specific and highly complex. The innovations they are capable of delivering are impressive, and some could well revolutionise the sector, if they haven't already ...
Just a few examples!
- Next-generation vaccines with messenger RNA from Moderna
Three years ago, with the development of messenger RNA-based COVID-19 vaccines, Moderna made it possible to produce vaccines rapidly by delivering a small piece of genetic material that instructs cells to produce the viral protein and trigger an immune response. Since then, mRNA vaccines have offered the possibility of responding rapidly to emerging infectious diseases and adapting to new variants.
- Interfering with genes: CRISPR Therapeutics and Vertex Pharmaceuticals
More recently, pioneering companies such as CRISPR Therapeutics have revolutionised the therapeutic landscape by harnessing CRISPR-Cas9 gene-editing technology to combat genetic diseases such as sickle cell anaemia and beta-thalassaemia. In partnership with Vertex Pharmaceuticals, CRISPR Therapeutics has made significant advances in the development of targeted gene therapies, offering hope to patients suffering from rare genetic diseases sometimes considered incurable.
Enormous progress has also been made in the treatment of cancer - oncology is probably the most successful field in terms of understanding how a disease is caused by certain genetic mutations and the ability to combat these mutations with targeted therapies.
- Harnessing the power of antibodies: Regeneron Pharmaceuticals
Age-related macular degeneration (AMD) is an eye disease that can cause severe vision loss. Regeneron has developed an innovative drug, Eylea, a monoclonal antibody that specifically targets the factors responsible for the progression of this disease. This treatment has revolutionised the management of AMD, offering patients a more effective treatment option and significantly improving their quality of life.
- How can Regeneron explain such an innovation?
Over the 35 years of its existence, Regeneron has succeeded in maintaining a constant flow of innovations, making the company a successful disrupter in biotechnology.
At Regeneron, every stage in the drug development process is accelerated and optimised thanks to a set of technologies called VelociSuite®. These technologies make it possible to select the best drugs and prepare them for manufacture in record time: 8 months compared with several dozen months previously.
These examples are provided for illustrative purposes only. This information does not constitute, in whole or in part, an investment advisory service, an offer or a personalised recommendation for the investment products or services presented.
Does innovation pay off?
5 years ago, an investor would have significantly outperformed the MSCI World Health Care by investing in the 10 healthcare companies with the highest ratio of R&D expenditure to sales.
After soaring after Covid, this group of companies still managed to maintain a high level of growth over the following years, although the sudden rise in interest rates in 2022 affected their financing capacity.
At Groupama AM, we select companies that have innovation in their DNA!
G Fund - Global Disruption : Investing in innovation not just in healthcare!
A conviction-based international equity fund, G Fund - Global Disruption aims to identify those disruptive companies, the leaders of tomorrow, whose growth, driven by major long-term trends, is accelerating. These trends include digitalisation, innovation in healthcare, the increasing scarcity of natural resources, the environment and changes in consumption patterns.
G Fund - Health and Wellness : Investing in health and wellbeing!
Nous avons lancé fin 2022 un fonds actions internationales qui investit en sélectionnant des sociétés du secteur de la santé et du bien-être. Le fonds investit dans des industries innovantes à forte croissance tels que la Medtech2, les instruments de R&D, de diagnostic et le bio processing3.
G Fund Health & Wellness investit dans des sociétés qui ont un impact positif sur les objectifs de développement durable (ODD 3 et/ou ODD 9). Le fonds est Article 9 SFDR et labélisé ISR.
G Fund Health and Wellness est diversifié dans d'autres industries qui englobent la santé et le bien être tels que : la nutrition, les services environnementaux, l’alimentation, le sport, et la numérisation des services de soins de santé.
The main risks are :
- Risk of capital loss: The capital invested may not be returned in full.
- Equity risk : Changes in share prices may have a positive or negative impact on the net asset value of the fund.
- Liquidity risk: Linked to exposure to small- and mid-cap stocks, whose free float may be limited.
1 Biosimulation, also known as computer modelling, makes it possible to test molecules in the field of pharmacology without the need for clinical trials.
2 Medtech: healthcare technology
3 Bio-processing: specific process that uses complete living cells or their components to obtain the desired products.
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