The Asian Healthcare thematic portfolio (or “Vue”) has generated performance of 28.79 % for investors over the 12 months to to 12/03/18. By way of comparison the ASX is down 1.68% in the same period. Strong performances from Hutchison China MediTech (+130.4%), Sino Biopharm (+124.1%), and AbbVie (+77.4%) were the greatest positive contributors to the overall return.
Investing in Asian Healthcare
There is rising demand in Asia for sophisticated healthcare products and services—driven by an ageing and increasingly affluent population, as well as the high prevalence of chronic diseases in the region.
As some of the emerging economies grow and prosper, they are likely to spend more on their health and wellbeing. Governments around the region are also increasing their healthcare programmes. This presents opportunities for hospitals, healthcare facilities and pharmaceuticals.
The healthcare market in the region (consisting of pharmaceuticals, medical devices and healthcare technology) is expected to grow from US$1.34 trillion in 2012 to US$2.2 trillion by 2018, implying a compounded annual growth rate (CAGR) of 10.5%. This implies strong growth in healthcare spending per capita – 4.8% CAGR across the region.
Macrovue’s Asian Healthcare Vue
The Asian Healthcare Vue is designed to give exposure to healthcare companies that are positioned to benefit from the significant rise in healthcare spend across Asia. Some of these are well known global pharmaceutical companies like Johnson and Johnson and AbbVie but the bulk of the portfolio is in Asian domiciled companies that are more pure plays in the sector where they operate. For example:
Huitchison China MediTech (HCM-US)
Hutchison China MediTech Ltd researches, develops, manufactures, and sells pharmaceuticals and health-oriented consumer products. The company plans to become a global player in Oncology and immunological diseases. Hutchison has seven drug candidates in clinical trials, five of whom have already achieved the “proof of concept stage”. Hutchison China MediTech announced on Feb 14, 2018 that it has completed the enrolment of 527 patients in China for pivotal Phase III trial of fruquintinib (jointly developed with Eli Lilly) in advanced non-small cell lung cancer (‘NSCLC’).
Top-line data is expected to be reported in H2 2018. This comes after the Phase II trials showed positive data with no unexpected safety issues. It is also worth noting that the same molecule (fruquintinib) has demonstrated positive results last year for the treatment of third-line colorectal cancer, which is now pending NDA (New Drug Approval) approval in China.
Sino Biopharmaceutical Limited (1177-HK)
Sino Biopharmaceutical researches, develops, manufactures, and markets Chinese medicines and modern chemical medicines primarily in mainland China. It produces medicines in two core therapeutic categories – cardio-cerebral diseases and hepatitis. It is ranked the #1 liver protection drug manufacturer and has become the largest domestic anti-HBV (hepatitis B virus) drug provider and is extending development efforts to oncology, analgesic and respiratory medicines.
Sino Biopharmaceutical stands out among Chinese pharma companies with its strong R&D capability and a targeted product strategy, which should likely make it a key beneficiary of the ongoing trend in innovation in the Chinese pharma industry over the next 5-10 years. Analysts also point to its well diversified product portfolio focusing on 10 key therapeutic areas and sizable sales force with extensive network coverage.
U.S. based AbbVie, Inc. is a leading global biopharmaceutical company. ABBV has roughly 28,000 employees in 170 countries around the globe. It is involved with the discovery, development, manufacture and sale of a broad line of proprietary pharmaceutical products which are focused on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology.
It is also active in oncology (including blood cancers), virology (including hepatitis C and human immunodeficiency virus), neurological disorders (such as Parkinson's disease), metabolic diseases (including thyroid disease) and complications associated with cystic fibrosis, as well as other serious health conditions. Ongoing demand for AbbVie’s blockbuster drug Humira (a biologic injectable treatment for rheumatoid arthritis) and strong performance from new Hepatitis C (HCV) drug Maviret is underpinning the stock’s outperformance over the past year.
Get more insights of investing in Asian healthcare and explore the top 10 Asian healthcare stocks.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
*As of 15/03/2018. Returns are expressed in AUD. Past Performance is not a reliable indicator of previous performance. See how our performance is calculated.