by Ronald DePinho, M.D. We just passed the 40th anniversary of the biotech industry, a…
Investing in the Healthcare Sector: How to Help Humanity and Make Money at the Same Time
In the last year and a half of the pandemic, we have become aware of the great importance of healthcare. And even more, after seeing hospitals all over the world saturated, even having to temporarily build others, in places like hotels or industrial buildings.
According to data from the World Health Organization (WHO), processed by the World Bank, Norway is the country in the world that invests the most in health, followed by Switzerland and the United States.
Only 2.1% of investment in health is earmarked for reducing and preventing disease. Spending per capita is 82 euros on average in the European Union.
There are different ways to invest in healthcare, such as investing in mental health clinics, outpatient surgery, pharmaceutical laboratories, biotechnology companies, investment funds or buying hospitals outright. Today I will discuss these last three options, but for this I have great experts in the field to give you different views on the subject.
This type of investment is called “impact investing” because you can make a profit while helping humanity. It is, therefore, essential, yet we do not always think of public or private healthcare and research as a possible investment for our portfolios.
Is there really money to be made in this sector? If so, how?
- Buying Hospitals: the Vision of an Investor in the Private Healthcare Sector.
Gabriel Masfurroll, Spanish entrepreneur and investor, is a clear example of someone who has invested in this sector and achieved great results. He started working in several relevant hospitals in the UK, USA and Spain. Then, at the age of 46, he set up USP Hospitals in 1996. He was in charge of two people at the beginning, while a few years later there were already 7,000 employees in 4 countries (Spain, Portugal, Morocco and Angola).
He sold his business and has thus become one of the most recognized businessmen in Barcelona and is currently a consultant and advisor to large national and international funds and groups.
Later, encouraged by his son, he bought the first hospital in Barcelona, in the neighborhood of Tres Torres, which he considers a very profitable business. Later, they bought the second one in Lérida and, for the moment, they are still studying new opportunities. This is one of the ways of investing in the private health sector.
- Cancer Research: Investing in Investment Funds
More and more investors believe that it is possible to help fight diseases such as cancer and make money at the same time.
Sujuan Ba, the president and CEO of the National Foundation for Cancer Research (NFCR), also sees it this way.
She is also Co-Founder and CEO of the AIM-HI Accelerator Fund, a non-profit organization established with an initial grant from the National Foundation for Cancer Research which, among other roles, serves as an investment fund focused on the fight against cancer. Its mission is to accelerate oncology discoveries from lab to patient bedside by impacting early stage oncology companies.
-What is the AIM-HI Accelerator Fund and what companies does it invest in?
A research platform that supports a large number of cancer therapies under development, from the discovery phase through various stages of clinical evaluation, accelerating U.S. Food and Drug Administration (FDA) approval and commercialization of these new approaches to diagnose and treat cancer.
Sujuan Ba defines how “the AIM-HI Accelerator Fund offers emerging biotech companies and investors very attractive partnership opportunities leading to clinical development and commercialization by pharmaceutical companies and venture capital funds.”
-What kind of companies does the fund invest in?
In oncology startups that are developing new oncology drugs that could save lives.
These companies are all in early stage development. It takes 5-7 years, sometimes even longer, for oncology drugs to reach late stage investment exits, either through M&A or IPO.
-Types of investors investing in it?
Investors looking for high-risk, high-reward opportunities in the biotech sector and trying to impact humanity.
-What have we learned from Covid19 and research in the health sector, according to expert Sujuan Ba?
“COVID-19 has shown us what is possible when the hands of science around the world are joined. However, the triumph of the fastest vaccine development program in history is not just a miracle or a coincidence of discovery or innovation. Over the past few decades, enormous amounts of resources have been invested in basic scientific research. Advances in cancer genomic analysis, diagnostic techniques, targeted therapies, cancer vaccines and other medical breakthroughs have made vaccines and treatments for COVID-19 possible.
2021 is poised to be one of the most important years of progress against cancer to date.
AI-based cancer detection technologies capable of reducing the number of false positives and false negatives are being developed.
New tools are being created that allow us to map gene expression throughout a cancer biopsy. New epigenetic drugs could bring cancer cells back to normal instead of destroying them completely. These are just examples of the exciting developments I expect to see in the coming years.”
- Investing in Biotech Companies
Olivier Jarry and Dr. Maria Jose Alonso, who leads LIBERA BIO (a biotechnology company), comment that in the last 40 years, investors have seen an explosion of knowledge, led by exponentially growing computing capabilities, and have quickly understood the potential of technology companies, investing in Microsoft, Apple and many others.
“Life sciences, due to their complexity, have taken a few more years to benefit from this computing power, such as the sequencing of the human genome in the early 2000s (Nature). Since then, all types of investors have understood the potential of life sciences investments,” adds Olivier.
– By type of investor, what do they invest in and how in biotech?
Individual investors: they have preferred to invest in large pharmaceutical companies such as Pfizer or Novartis, or have donated funds to non-profit organizations focused on cancer research.
Wealth managers and institutional investors: have funded venture capital and private equity firms whose funds are used for cancer research.
Family offices: some with direct experience in cancer suffering are investing directly in smaller biotech companies.
– How did it come about and what is Libera Bio?
Libera Bio arises from three decades of research in the MJ Alonso Laboratory at one of Spain’s leading universities, the University of Santiago de Compostela.
Professor María-José Alonso has published hundreds of scientific articles in high quality journals, has collaborated with leading universities such as MIT in Massachusetts and NGOs such as the Gates Foundation; she is a member of several medical academies in the United States and Europe.
They focus mainly on the treatment of cancer targets that cannot be administered drugs. Olivier comments that “these cancers, such as pancreatic cancer, do not have very satisfactory treatments today because the mutated proteins inside the cancer cells are very difficult to reach, particularly with biologic agents such as full monoclonal antibodies.”
Libera Bio is the first company to demonstrate preclinical in vivo efficacy in the treatment of pancreatic tumors caused by KRAS mutations, representing> 90% of cases in the clinical setting, in a mutant-specific and actively targeted manner (selective delivery to tumor cells and metastatic cells).
-Is there real progress and is it important to invest in it?
The expert answers “A clear yes to both questions. Little by little, researchers are developing new diagnostics, genetic tests to qualify predisposition to certain types of cancers and obviously new treatments, many of them qualifying as “precision medicine”, i.e.: targeted treatments.
Many of these discoveries are being made by small companies like Libera Bio, leveraging work done in leading universities and government laboratories, in concert with larger biopharmaceutical companies.”
New drugs have helped patients achieve indefinite remission, such as imatinib for leukemia. Entirely new and successful segments of oncology have emerged, such as “immuno-oncology,” which utilizes the body’s natural defenses against cancer. With the advent of generic drugs, some common categories of cancers, such as breast cancer, have become more affordable to treat, even in low- and middle-income countries (LMICs).
-Why invest in the healthcare sector?
In addition to the global needs of the sector for the good of humanity, the three experts comment on key points to bear in mind:
According to Masfurroll, “Investing in Healthcare/Health is a constant profitability factor. In times of crisis, it is a safe haven and in times of expansion it is profitable.
There are many opportunities in this sector and they are very interesting. Demand is growing exponentially. The world population does not stop growing. Life expectancy, even in spite of the Covid 19 pandemic, continues to increase.
The prevalence of diseases is increasing. Old diseases are returning due to globalization and new ones are emerging and spreading. This industry is very cross-cutting because it interacts with others that it dominates such as education, technology, research, AI, sustainability, among others. There will always be a need for healthcare.”
Sujuan comments that “By investing in funds like AIM-HI, by working alongside innovative biotech companies, private foundations and venture philanthropists and impact investors, AIM-HI Accelerator Fund is revolutionizing 21st century medicine. This is impact investing; and the investor would be part of that.”
Regarding investing in biotechnology, Olivier says, “thereby bringing new treatment options to as many cancer patients as possible.”
In short: Without health, nothing is worth anything. Health is the most precious asset we have. That is why investing in health, in addition to being financially profitable, is socially profitable.
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