As the local Nordic life science ecosystem was highlighted at the NLSDays in Malmö last month, a slightly bigger industry event took place on the other side of the Atlantic. BioStock reached out to Claus Henrik Johansen, Senior Portfolio Manager Healthcare for Danske Bank Asset Management, for a quick report on the Morgan Stanley Global Healthcare Conference in New York.

This year marked the 17th edition of the Morgan Stanley Global Healthcare Conference. Being one of the major industry events in the USA, this year’s conference gathered more than 1 460 investors and 230 corporate executives. The agenda featured the American investment bank’s global equity research analysts in conversation with C-level executives about the current state of the industry and future investment opportunities in pharmaceuticals, medical technology, biotech and more.

BioStock reached out to Claus Henrik Johansen, Senior Portfolio Manager Healthcare for Danske Bank Asset Management who provided his personal views on the major takeaways from the conference.

Claus Henrik Johansen, Senior Portfolio Manager Healthcare, Danske Bank Asset Management

Claus, in your role as a healthcare senior portfolio manager for Danske Bank Asset Management you attend quite a few industry events and conferences every year. Where does the MSGHC rank in terms of importance and industry impact, according to you?

– The conference is very important as investors are coming back from summer vacations and Labor Day in US and investors are eager to position themselves in 2H’2019. I would say this conference is VERY important.

»Enhancing the patient experience and make the interaction seamless is very important. Engaging in real time with Apps is becoming more and more important. Creating interaction in a  way that can make the interaction ”fun” and deliver value to customers is very important.« — Claus Johansen

Drug pricing policies and medical costs have been hot topics in the US for quite some time. What were the main issues of the healthcare sector being discussed at this year’s conference?

– The investor debate has circled around two issues. First, how likely is it that US is moving towards an international price index that set the prices of drugs at a certain mark-up to an index based on international prices. Secondly, how likely is it that the Democratic Party will win the US election next year and implement a ”Medicare for X” reform, meaning that more elderly will get access more broadly to ”cheaper” healthcare services. The funding of this kind of reform is also being debated.

In terms of buzzwords being tossed around in panels and in general conversation — what’s hot and what’s not right now? 

– Consumerization of Healthcare is the buzzphrase right now. How companies can interact and create a consumer interface that can enhance the competitive position of the companies. Enhancing the patient experience and make the interaction seamless is very important. Engaging in real time with Apps is becoming more and more important. Creating interaction in a way that can make the interaction ”fun” and deliver value to customers is very important.

Who, or what, would you say has made the strongest impression on you at this year’s conference, and why?

Livongo Health and ResMed, both companies with a strong value proposition using cloud based IT solutions, creating high consumer satisfaction and high medical value to payors, stood out. #DigitalHealthcare solutions are very important going forward.

What major market and/or industry trends are you keeping a close eye on right now?

– Within the healthcare more broadly I pay attention to digital solutions that can save costs for the payors. Within therapeutics I pay attention to new cell therapies like allogeneic cell therapy and also stem cell therapies, where larger companies like Novo Nordisk and also Vertex are stepping up both research and clinical activities. TIL therapy – Tumor Infiltrating Lymphocytes is also worth mentioning and here is Iovance Therapeutics worth watching. RNAi therapies where Moderna Therapeutics, Alnylam Pharmaceuticals and the current IPO of BioNTech are worth keeping an eye on. A new potential game changing class of antibodies, ”IGM” antibodies, which are more complex but perhaps more ”sticky” and potent, from IGM Biosciences, is also worth paying attention to.

»The sector will experience a lot of volatility, as we have seen in the last few trading days, as US politics will be in the news in the next 14 months. I can’t get into pointing out specific companies, but being patient in the next couple of months and analyzing some of the stocks that will get hit due to ”US politics in the news headlines” could create some interesting entry points for a lot of companies in the sector.«

Generally speaking, what is your view on investing in the life science sector in the current market climate? 

– The sector is on an overall level very attractive given expected earnings growth, while other sectors are seeing a more negative or flattish outlook. Despite the noise out of US and Washington, the sector is relatively attractive. Medtech stocks are relatively more expensive than Managed Care companies and most of the larger pharma companies also looks relatively attractively priced.

In conclusion, did you spot any particularly interesting investment opportunities and what key learnings do you bring back home with you to Denmark?

– The sector will experience a lot of volatility, as we have seen in the last few trading days, as US politics will be in the news in the next 14 months. I can’t get into pointing out specific companies, but being patient in the next couple of months and analyzing some of the stocks that will get hit due to ”US politics in the news headlines” could create some interesting entry points for a lot of companies in the sector.

Learn more: Investing in healthcare

Prenumerera på BioStocks nyhetsbrev