Search ASX code:
Generic filters

The vaccines of tomorrow: how to invest in biotechnology

Biotechnology has experienced extraordinary growth in recent times and came to popular attention as companies raced to find vaccines and cures for COVID-19. While investing in this area has obvious appeal from a social and moral perspective, it can also be a highly lucrative space as a growth investment in a portfolio.

Healthcare and biotechnology

Biotechnology specifically refers to technologies that use biological processes, capturing companies that focus on research, development, manufacturing and/or marketing of products based on biological and genetic information. The different types of biotechnology include biological drugs, vaccines, immunotherapy, gene therapy, orphan drugs and genetic engineering.

Biotechnology is predicted to be valued at more than US$833.34bn by 2027, compared to US$447.92 billion at the end of 2019¹, and will continue to grow, driven by the growing global population and the need for affordable, effective treatments and vaccines.
Biotechnology will also be a beneficiary of population aging, particularly in Western countries. The reason for this is that an increase in the volume of older citizens is likely to have an accompanying and proportional increase in the volume of age-related diseases such as cardiovascular disease, dementia or arthritis, all requiring treatment².

Gilead is one example of a company with prospects in this space. Gilead is already well-known for its highly effective HIV treatments but is also targeting US and European approvals to market a drug called Filgotinib to treat rheumatoid arthritis³.

In a demonstration of the growth in this industry, this year alone, 30-35 biotechnology companies are anticipated to go public, raising approximately US$3.5 billion.

The healthcare sector as a whole is likely to see greater investment as a result of the COVID-19 pandemic. For example, national health spending growth in the US is expected to average 5.4% annually through 2028, reaching US$6 trillion a year. Biotechnology will also be a beneficiary of this increased investment.

Why consider biotechnology in your investments?

Investment and value from biotechnology is expected to grow in the coming years. While the trend already existed due to continuous tech improvements and the needs of a growing population, the COVID-19 pandemic has created a new spotlight on this area which may accelerate its growth.

Australian investors are likely to already be exposed to this growth segment in the concentrated domestic market. However, they may be missing exposure to the US, which dominates the global market for biotechnology.

Biotechnology could be considered part of a sector allocation to healthcare, or investors might view it as a thematic investment. You can find more information about thematic investing and using it in your portfolio in our latest whitepaper.

Ways to invest in biotechnology

There are a range of ways to access the biotechnology industry.
Investors could consider direct shares in biotechnology companies or alternatively consider managed funds. Direct shares can be a high-risk approach due to the high failure rates of drug testing and long periods of development (i.e., long periods where there may be no or a limited return on investment). There’s also the element of chance – has the investor picked the winner? It could take years to know.

Managed investments, be it actively managed funds or passive options like ETFs, can assist in managing risk by spreading it across a larger number of companies. Investors could choose to invest by taking a sector approach and investing in a fund focusing on broader healthcare, or look at industry-specific options focusing on biotechnology. ETFS S&P Biotech ETF (ASX Code: CURE) is one such example that offers broad exposure to US biotechnology.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW or entering your email below.

Note: the report is 100% free.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Afterpay, Zip Co, Sezzle…

Is BNPL the opportunity of a lifetime or is the sector a ticking time bomb?

Rask's analyst has just finished a 7,500-word report, The Ultimate BNPL Sector Report, taking a deep dive into this booming ASX sector. It shines a spotlight on each of the major players. You can get the full analyst report for FREE by CLICKING HERE NOW.

Note: the report is 100% free.

Kanish Chugh is Head of Distribution for ETF Securities Australia. ETF Securities is the responsible entity and issuer of units in the ETFS S&P Biotech ETF (ASX code: CURE) which is referenced in this article. CURE invests in companies referenced in the article.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

Keep reading:

Rask Media’s Ultimate BNPL Sector Report

Afterpay, Zip, Sezzle… is this the opportunity of a lifetime? Or is BNPL a ticking time bomb? This 7,500-word analyst report takes a deep dive into the BNPL sector and shines a spotlight on each of the major players in this booming market. 

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

As we emerge from COVID-19, some tech companies are growing faster than ever. Rask’s investment analysts have identified 3 growth stocks set to benefit. Big time.

Enter your email below to access this report for free, including the names, ticker codes and analysis.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.