Advisor Flipbooks

10 INVESTMENT THEMES FOR 2023 · 5 Diana Wagner is an equity portfolio manager with 26 years of experience. She is a manager for Washington Mutual Investors Fund. Innovation is at an all-time high in health care. The macro environment may have topped investor concerns over the last year, but innovation is what ultimately drives long-term value creation. Pharmaceutical companies have invested heavily in drug discovery in recent years and, as a result, deep pipelines of pioneering treatments are being developed to tackle some of the world's biggest health issues. Eli Lilly and Novo Nordisk, for example, have developed obesity treatments with the potential to reduce body weight by as much as 25%. AstraZeneca has become an oncology leader with advanced therapies for lung, bladder and breast cancer. Gene sequencing is another key innovation with major health and investment implications. In the future, we may be able to pair genetic sequencing with gene-based interventions to deliver personalized, precision medicine. Imagine replacing defective or missing genes with normal, healthy ones. That future is not far off, in my view. I fi nd opportunities in health care services equally exciting. Most doctors operate in a traditional fee-for-service model, getting paid based on volume. But companies like UnitedHealth and Humana are instead rewarding doctors for keeping patients heathy through new payment models. These models seek to achieve the so-called "quadruple aim" in health care — better outcomes, higher patient satisfaction and higher physician satisfaction at a lower cost per capita. Achieving all four is now a real possibility. 4. Golden age of health care Source: Statista. Estimates provided by Statista as of July 2022. Global revenue from gene therapy and other regenerative medicine (USD billions) Estimates 2030 2029 2028 2027 2026 2025 2024 2023 2022 2021 96 79 65 54 44 37 30 25 21 17 Gene therapies could reshape the future of health care

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