HAN-GINS Leading Healthcare Innovation Technology ETF highlights gene therapy, telehealth as exciting sub-themes in health care
Anthony Ginsberg, Co-Creator of The HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)
– Gene therapy, medical device, biotech and telehealth are the among the most exciting sub-themes
– US companies dominate the sector
– Exact Sciences, BioNTech, Regeneration and Seegene are among the companies highlighted in the sector as offering some of the most interesting opportunities for potential investors
Anthony Ginsberg, Co-Creator of The HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL), which focuses exclusively on the life sciences and smart healthcare sectors has outlined the themes and stocks in healthcare innovation that he believes are among the most interesting for potential investors.
Medical Devices remain the largest subtheme in the WELL ETF with a 56.84% weighting, followed by Biological Engineering at 23.17% (includes Biotech), Robotics (5.13%) Neuroscience (6.68%), Genome Sequencing (5.53%), Healthcare Trackers (2.44%), Bioinformatics (0.19%)).
However, there are areas that Anthony and his team are energized about:
• Gene Therapy: The Gene Therapy market is expected to show a decade long market growth rate of 31.1%, annualised (CAGR). While the US is currently the largest region for this sector, some commentators say Asia-Pacific is expected to be the fastest growing region over the next decade.
• Medical Device Manufacturers: COVID-19 supply constraints are providing a boom to medical device and product manufacturers, particularly those focused on PPE & devices related to the pandemic (e.g. gloves, masks, respirators, ventilators).
• Telehealth: US Government Medicare insurance (reimbursement) rules have recently broadened to include various telehealth services. This ensures Medicare insurance will pay for virtual/remote diagnostics and care now, creating huge demand. Post-COVID, Anthony expects hospitals to shift a larger volume of patient care to telehealth. Digital health technologies will see accelerated adoption.
WELL currently has 107 constituents, with the US country weighting dominating at 81.0%. It is followed by Japan (5.2%), Switzerland (3.2%), China (2.9%) and the UK (2.2%).
A growing number of smaller medical device companies are amongst WELL’s leading contributors. This is in line with this subtheme enjoying a rerating boosted by the recent spike and resurgence of COVID cases across the US and Europe.
On the Biotech side, President Trump began using Regeneron’s new anti-body treatment, helping the stock to a 57% gain for the year, making it WELL’s 7th largest holding at 3.8% (Bloomberg, 6 October 2020). The US government has also recently placed a $450m order for the treatment .
COVID-19 is speeding up adoption of Telemedicine, Medical Wearables, Robotic Surgeries and Biotech. The WELL ETF (104 holdings; 7 subthemes), has seen holdings across Biotech, Medical Devices and Gene Editing enjoy the biggest gains. These include Regeneron, Seegene, Livongo, Biogen, Exact Sciences, Illumina and BioNTech.
The company recently won FDA (US Govt) approval, to process COVID tests from specimens taken by people at home. It has also been awarded numerous US statewide contracts for COVID testing.
Along with Pfizer, its COVID vaccine partner, they are currently scaling up production of one of the world’s leading vaccine candidates.
Anthony and his team remain bullish on Regeneron based on the large US government orders they received recently – and White House endorsement. Their anti-body treatment appears to show very encouraging signs of helping COVID-19 patients.
Seegene (South Korea)
The company now exports its COVID test kits to over 54 countries – with its global order book growing exponentially.
Anthony Ginsberg said: “The healthcare industry is transforming in numerous ways, benefiting a number of innovative healthcare companies. There is an explosion of telehealth visits, a huge increase in remote inpatient consultations and family visits, growth in online scheduling and the automation of patient triage, and greater use of artificial intelligence to allocate resources and make clinical decisions. Other areas of growth include supporting remote work and communication for team members, mobilising teams to create PPE (equipment) and ensuring connectivity at remote COVID-19 testing sites, together with expanding capacity. All of this makes Healthcare Innovation one of the most exciting areas to invest.”