Digital health

Investing in digital health sector

The intersection of digitalisation and healthcare in an increasingly hyperconnected world has given way to the field of digital health, which includes industries like mobile health, health information technology, wearable devices, technology-enabled drug discovery, telemedicine and many other applications.

A new age for health

In the healthcare industry today, technology is already prevalent. From software that supports a doctor’s medical diagnosis to the use of data mining to analyse large volumes of patient information, technological solutions enable improved health evaluation.

As interconnectivity has increased generally, so too has its reach across all aspects of our lives. By 2030 the number of devices connected by the internet of things (IoT) is set to more than double from current levels (see chart). This expansion naturally includes not only how we identify and treat all types of illnesses, but also how we inform our understanding of health and disease.

This presents a compelling prospect to investors, as novel and exciting technologies emerge that create real world solutions. One such nascent and exciting area of opportunity is digital therapeutics, which are software-based devices used to treat disease. In 2020, a video game was approved to treat attention deficit hyperactivity disorder (ADHD) in children, the first gamebased therapeutic treatment to receive approval in the US for any condition.1 Its developer, a self-described prescription digital medicine company, creates personalised digital therapeutics. It is also a small, privately-owned company that more closely resembles a San Francisco tech start-up than a traditional pharmaceuticals corporation.2

In another field dominated by startups, bioinformatics companies have popped up over the past decade, often near universities where pioneering research is carried out. Bioinformatics is where biology meets computer science and often involves machine learning to process huge volumes of data that maps and identifies patterns in the human genome. The key objective of such biological-systems research is to identify a protein or a pathway in the body that may facilitate a particular disease. In doing so, it becomes possible to block or change that disease initiator within the body, thereby influencing disease outcomes.3

This presents a compelling prospect to investors, as novel and exciting technologies emerge that create real world solutions.

The digital health sector is supported by strong underlying industry trends. With ageing populations and chronic lifestyle diseases on the rise around the world, healthcare costs have grown, leaving the sector ripe for disruption. At the same time, increased focus on health and wellness has driven up patient demand for better and customised care.

Like in other sectors, digital technologies in healthcare have the potential to disrupt the entire value chain, from drug discovery to the management of care delivery, including patient selfcare. When it comes to patient care, the idea is that technology will optimise the care that medical professionals deliver. As American Medical Association trustee Jesse M Ehrenfeld, MD, put it, ‘Combining AI (artificial intelligence) methods and systems with an irreplaceable human clinician can advance the delivery of care in a way that outperforms what either can do alone’. In this way, digital health will complement the essential services delivered by healthcare professionals, many of whom are under immense strain that the pandemic has gravely exacerbated.

Recently, digital health has hit several significant funding milestones as the theme gains traction among investors. Digital health deals hit an all-time high last year, with eight digital-health unicorns (privately held start-ups valued at over USD1 bn) born in the third quarter of 2021 alone. The pandemic helped drive this push, as the cancellation of in-person consultations fuelled the growth of the previously nascent telehealth industry. Growth in telehealth usage peaked at 80x prepandemic levels amidst the first lockdowns of 2020 before stabilising at 38x toward the beginning of 2021.

Digital health is a highly innovative space, spanning multiple healthcare sub-themes. From diagnostics to the delivery of patient care, developments in digital health have already started the disruption process that will transform the healthcare sector to the benefit of both healthcare providers and patients. Supported by strong underlying trends, successful companies in the digital health space could offer investors attractive returns over the coming decades.

 

[1] Source: Nature
[2] Source: www.akiliinteractive.com
[3] Source: Biopharmatrend.com, 2020
 
 
Disclaimer
Pictet & Cie (Europe) SA, 15A, avenue J. F. Kennedy, L-1855 Luxembourg/B.P. 687 L-2016 Luxembourg, established in Luxembourg, authorised and regulated by the Luxembourg Financial Authority, Commission de Surveillance du Secteur Financier. Banque Pictet & Cie S.A. is a company incorporated under Swiss Law, authorised and regulated by the Swiss Financial Market Supervisory Authority FINMA.
This is a communication issued by Banque Pictet & Cie S.A. and distributed by Pictet & Cie (Europe) S.A., which serves merely for information purposes in relation to financial services provided by the members of the Pictet Group. The material is not an investment research. The addressees of this document are fully responsible for any investment or other transaction with a member of the Pictet Group or with any third party. Moreover, it does not contain any offer and is not an invitation to enter into any type of agreement or transaction with a member of the Pictet Group or with any third party.
Using this communication implies no right or obligation for any member of the Pictet Group or for its reader. The Bank is under no obligation to update the information contained in this communication, and a representation or warranty, express or implied, could be made as to its accuracy or completeness.
Moreover, this marketing communication is not intended for and may neither be provided to nor used by persons who are citizens of, domiciled or resident in, or entities registered in a country or a jurisdiction in which its distribution, publication, provision or use would violate current laws and regulations. Anyone who reads this document agrees to comply with the laws and regulations applicable in their jurisdiction including the field of copyright law. The addressee cannot violate the copyright on this document. This publication and its content may not be cited, unless the source is indicated.
Moreover, the Pictet Group is not liable for the use or transmission of the content of this document by its addressee, for any purposes. Therefore, any form of reproduction, copying, disclosure, modification and/or publication of its content is under the sole liability of the addressee of this document, and no liability could be incurred by any member of the Pictet Group.
請確認您的身份
請確認您的身份以繼續
選擇其他身份
Confirm your selection
By clicking on “Continue”, you acknowledge that you will be redirected to the local website you selected for services available in your region. Please consult the legal notice for detailed local legal requirements applicable to your country. Or you may pursue your current visit by clicking on the “Cancel” button.

Welcome to Pictet

Looks like you are here: {{CountryName}}. Would you like to change your location?