Janus Henderson’s Singapore CEO Surveys How Global Life Sciences Offer Potential Amidst Uncertainty

Andrew Hendry, Singapore CEO and Head of Distribution for Asia at Janus Henderson Investors offered delegates at the Hubbis Independent Wealth Management Forum on May 10 a lively presentation on the merits of healthcare and biotech thematic investments amidst global uncertainty, and especially why life sciences offer both great resilience and major upside for investors. This is an introductory snapshot of what was a very detailed talk, supported by an excellent slide-show presentation, which readers can access below.

Hendry opened his talk by telling delegates that he was going to give virtually exactly the same talk as at the May 11, 2022, Hubbis IWM Forum (see this link for a review of that presentation: https://hubbis.com/article/janus-henderson-s-andrew-hendry-on-why-healthcare-offers-such-a-compelling-investment-opportunity).

He explained that the story remains the same because the overall scenario remains similar. “One year on and nothing has changed,” he stated. “War, inflation, higher rates, and on top of that bank crises and other problems.”

Hendry said he had three key reasons for reiterating his appeal to the independent wealth community, and these are the strong returns of 11%, 37% and 58% of their three key healthcare strategies that he had presented almost one year to the day earlier.

“If you had bought our nearly USD4 billion Global Life Sciences fund this time last year – and thank you to those who did so – you would have had an 11% return, despite all the problems and mess of last year,” he told guests.

“If you'd invested in our small Biotechnology Fund, it would have been 38% and then our nearly USD660 billion Biotechnology Innovation Fund, a hedge fund, you would have seen a 58% rise.”

Pointing to slide 3 of his presentation, Hendry explained how in the US, people keep getting older and as they move into retirement, healthcare costs for them almost triple. He said this is one of the biggest demographic drivers of healthcare demand going forward, and it is the same in most developed economies. “It is inexorable, it is unstoppable,” he said. “In the US, more than 10,000 people a day will turn 65 through 2030.”

And on the supply side, Hendry explained that numerous blockbuster drugs are coming off patent amongst the sixth largest pharmaceutical companies in the world, and at the same time, US FDA approvals take a long time, and many do not pass the process.

Given all that, those leading pharma powerhouses will keep buying up small and midcap pharma and biotech firms and buying in the products, with the top 18 pharma companies armed with a more than USD1.7 trillion war chest to do so. And the premiums for these acquisitions are at significant premia, and even at mouth-watering levels of up to 130% in some cases, he added.

When Janus Henderson launched this Global Life Sciences strategy back in 1999, he noted there were three blockbuster drugs in the entire world, out with aof total revenue of USD5 billion. In 2022 there were over 100 global blockbuster drugs, grossing over USD460 billion in revenue. “This is an unstoppable juggernauttrend,” he told delegates.

He concluded that the healthcare sector offers a wonderful combination of balance defence and potentialgrowth. Spending on prescription drugs and healthcare services tends to be consistent regardless of the economic backdrop, providing stability. While medical breakthroughs can lead to new end markets with the potential for explosive growth.

Hendry then went into more detail about the nearly USD4 billion UCITS Global Life Sciences Fund and the roughly USD660 million Cayman-incorporated Biotech Innovation Fund, a hedge fund. And he added that Janus Henderson also offers another entry point with the smaller USD117 million SICAV Biotechnology Fund.

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