August 21, 2020

Investment in essential MedTech and Health

The investment class MedTech is growing as investors are increasingly inclined to add social care to their portfolios.  At a time when we are reminded of how important our health is, this asset class could aviate, but in such a highly specialised sector that is also highly regulated, an asset class couldn’t get much more complex. Should we allow this to scare us off?

MedTech companies are improving access to healthcare, creating a better patient experience and saving human life. As aged populations increase, as disease rates rise and where resources are finite, there is a need for processes that digitise and link up the healthcare sector. Therein lies the opportunity, deploying MedTech as the solution to generate cost savings, efficiencies and improving capacity and client experience. 

It’s human nature to want cures and aids to work faster, better and with little-to-no pain. The evolution of healthcare drives this class and is evident in the Syndex marketplace. We see innovators of rapid diagnostic devices such as Orbis (almost-instant Covid-19 testing) and Dermasensor (Skin cancer detection). We also see mechanical devices that permit less invasive surgery, such as Orchestra Biomed (coronary stent alternatives) and Memic (robotic surgical arms). 

A sub-set of health-tech is natural therapeutics. The application of natural remedies are by no means a new concept, but the acceptance into the mainstream means the potential for increased patronage, which in turn prompts more research and development. A perfect example here is the evolution of medicinal cannabis; now widely accepted in its legitimacy and set to unfold and mature as other healthcare does. 

As investor’s ethics tip the balance of investment decision-making, more eyes are on this asset class. The deterrent is in the complexities of the regulatory environment, differing healthcare systems and technological applications to the human body; however, there isn’t a need for expert-level medical knowledge to invest. 

As Investopedia says, “It is certainly worthwhile to read up on the diseases or conditions that a company's products treat (or intend to treat), and the internet offers a wealth of information on almost every medical condition that constitutes a viable market opportunity. From peer-reviewed journal papers to individual patient blogs, any investor can get a sense of the driving factors in the treatment of any medical condition.”

The due diligence process an investor follows won’t wholly differ from any other asset class. As critical as always is the consideration of the dedicated management team and scientists; their qualifications and past successes are key indicators of future possibilities. It may take some investment of your time to get to know this new sector, but MedTech is not out of the reach of individual investors. 

New Zealand has homegrown some significant med-tech. Recent successes are seen in the overseas acquisitions of our med-tech companies; Biomatters, a leading provider of DNA data analysis solutions was acquired in 2019 and Adherium, a kiwi-founded med-tech company listed on the Australian stock exchange in 2015. It provides digital health technologies which address sub-optimal medication use in chronic disease. 

To borrow Investopedias opening question, “Would you be interested in investing in a sector that boasts above-average historical returns, strong returns on capital, government-enforced restrictions on competition and products that can be essential to maintaining people's quality of life?”  We have to hope, for everyone’s health, that investors see the light and pursue their initial curiosity and personal morals. The human race needs these investors.

The Syndex marketplace has seen many medtech offers; at any given time there is at least one listed. By expressing interest in the offer the investor is connected with the issuing party where more information is available and questions can be answered. A notable recent offer is the opportunity to invest in Orbis Diagnostics; an existing NZ Agtech business that has applied its scientific capability to development of a Covid-19 virus detection device.

To view our current MedTech offers, click here. 

Ross Verry

Ross Verry is CEO of Syndex and a shareholder. The views expressed above are purely his own. Please assess and research all your investment.

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