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More innovation, funding and global idea sharing look to be in store for the life science sector heading into 2015.
A recent Forbes article reiterates what many in the life science sector already know: the “global landscape of health” is due for some big shifts, “particularly in the life sciences.”
For investors that means it’s time to start looking at exactly what may happen in the space during 2015. After all, to achieve success in the market it’s essential to be aware of what’s coming next.
Trends to watch
Forbes outlines a number of trends it sees as key for those in the life science space to watch. Here’s a brief rundown of the top three:
- Widespread innovation: North America and Europe currently put out the most life science Patent Corporation Treaty applications each year, but Asia, Latin America and the Caribbean are increasing their output, meaning that more innovation in the life science industry is occurring in those locations. The shift may be due to the fact that developing countries are now gaining the resources to make contributions to the arena.
- More money for R&D: At the moment, just 10 countries account for 80 percent of research and development (R&D) across the globe. And as businesses often provide R&D funding, investor confidence can have an impact on how much money is awarded. Encouragingly, however, “confidence in biotech seems to have returned,” meaning that the industry may be able to take more steps forward in 2015.
- Entrepreneurs may take the lead: Barriers to entrepreneurship are on the decline all over the world, though in the UK and the Netherlands they are the lowest. It’s thus possible that those areas may be set to have some interesting life science-related developments coming out of them.
On a different note, a Mashable article notes that 2014 was a big year for health technology, and 2015 should be as well. Indeed, it quotes Unity Stoakes, co-founder and president of StartUp Health, as saying, “[d]igital health funding for the year is on track to double last year’s total. Some trends we’re watching include a growing corporate interest in digital health, more global cross-pollination of ideas, as well as increasing health consumerism as people move into the driver’s seat when it comes to their care.”
That may also be an area for investors to keep an eye on heading in to 2015.
Stock picks
Of course, some investors are keen on particular stock picks, not just information on trends. Luckily, market watchers are starting to release watch lists heading into the new year.
For instance, The Motley Fool’s Todd Campbell recently listed his top five life science stock picks for 2015, naming UnitedHealth Group (NYSE:UNH), Community Health Systems (NYSE:CYH), Cerner (NASDAQ:CERN), Celgene (NASDAQ:CELG) and Align Technology (NASDAQ:ALGN). The companies encompass a wide range of fields, from biotechnology to dentistry, and he believes that as it becomes tougher for investors to identify good companies in the sector, they may provide some upside.
It’s worth noting, however, that they are all quite large and investors might also be well served by looking at smaller companies working in similar fields, or by looking at the prospective regions mentioned above for companies making good progress.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.