Just what doctors ordered! Help cure cancer AND make a profit

THIS month’s breast cancer awareness campaign, backed by some of the world’s leading cancer charit i es, has provided a sobering reminder that despite vast improvements in survival rates, more than 1,000 women a week are still diagnosed with the disease.

It is just one of scores of cancers that can strike – and it is no wonder that billions of pounds a year are being spent worldwide to find effective cures for illnesses that will strike half the population in their lifetime.

Research and development is carried out by a huge range of firms, from drug makers to artificial intelligence designers, all driven by the desire to find the holy grail of combating this most feared of diseases.

Dan Coatsworth, stock market analyst at broker AJ Bell, says: ‘Many people like the idea of investing in a company searching for a cancer cure. They feel they are putting their money to a good cause and hopefully making a positive return on their investment, so it is a double win.’

The most obvious place for an investor to start is to purchase shares in pharmaceutical companies developing cancer- fighting drugs. But this can be risky.

Coatsworth says: ‘The downside of putting your money into pharmaceutical firms is that they can be high risk investments, particularly smaller companies which may not be generating any revenue and whose future success is pinned on a single product.

‘ Treatments must go through many tests before being approved for commercial sale. This process can be lengthy and costly – companies will often come back to invest ors t o ask for more cash in exchange for issuing new shares. Plus there is no guarantee the treatment will work once all the trials have been done.’

WHERE TO INVEST IN INDIVIDUAL SHARES

IF single company shares are your preference, then it is wise to focus on big name stocks with staying power rather than small companies that are more likely to crash and burn.

A popular option is global pharmaceutical giant AstraZeneca, which has a strong focus on oncology, the branch of medicine that deals with preventing, diagnosing and treating cancer. AstraZeneca is developing treatments for breast, ovarian, pancreatic and bladder cancers.

Until a few years ago such big drug companies were out of favour because of concerns over political interference on pricing and the problem of blockbuster products losing patent (and therefore profit) protection. But the market is now looking on them more favourably.

Coatsworth says: ‘AstraZeneca’s shares have been doing well over the past few years thanks to positive news on drug development, including approvals from regulators worldwide. Investors particul arly l i ked t he fact t hat 2018 represented its first year of sales growth since 2009.’

Its share price has risen nearly 60 per cent to £73 in the last five years. But the stock is not risk-free as the company still must face up to the reality of its drugs eventually losing patent protection – and even being a big player does not guarantee success with new drugs.

US firm Merck & Co is another option – with key parts of its business working on fighting cancer as well as preventing it.

James Douglas, manager of Polar Capital Healthcare Trust, a fund with a holding in Merck, says: ‘Merck has a drug called Keytruda which uses a patient’s immune system to help fight tumours. It is clever science that, importantly, can be used for different cancers. The company has also released positive data from a trial looking at how effective it may be as a treatment to help fight triple negative breast cancer – a cancer not fuelled by hormones.’ Its share price has risen 40 per cent in the last five years to $83 (£65).

CHOOSE FUNDS TO SPREAD THE RISK

IT can be prudent to spread risk by investing in a fund or investment trust that has stakes in companies working in the cancer field.

This can also widen your investment horizons as the funds also have access to private healthcare companies.

INTERNATIONAL BIOTECHNOLOGY

THIS £224 million investment trust has holdings in firms involved in different areas of the biotech and life sciences industries.

AJ Bell’s Coatsworth says: ‘About a third of its assets are invested in companies focused on oncology – with rare diseases being the trust’s next biggest health theme.’

The fund i s managed by SV Health Managers, part of SV Group which manages and advises a number of healthcare and life sciences venture capital funds.

Coatsworth says: ‘Investors buying this fund are putting faith in SV backing the right companies.’

Had you invested £1,000 in the trust five years ago it would now be worth £1,872.

POLAR CAPITAL GLOBAL HEALTHCARE

CHRIS Salih, investment trust expert at fund analyst FundCalibre, says a strength of this £253 million trust is the pedigree of its managers – Douglas and Gareth Powell. He says: ‘Both have a background of working in pharmaceuticals. They really know their stuff – one studied biotechnology at Oxford University and the other has a PhD in medicinal chemistry.’

Salih also likes how the portfolio is split between large companies (90 per cent of assets) and smaller innovation firms that have the potential for greater growth. These are typically disrupters of conventional medical practices aiming to deliver better healthcare for less money. Had you invested £1,000 in the trust five years ago it would now be worth £1,496.

SMITH AND WILLIAMSON ARTIFICIAL INTELLIGENCE

TIM Dey, co- manager of t he £202million Smith & Williamson

Artificial Intelligence fund, says key holding Siemens Healthineers is contributing to the fight against cancer.

Recognised for its diagnostic imaging know-how, Siemens uses an artificial intelligence tool to scour vast libraries of scan images so that potential tumours can be diagnosed more quickly. The firm l i sted on t he Frankfurt stock exchange in March 2018.

Dey says: ‘The tool is designed to help radiologists interpret images faster and more accurately, and to reduce the time involved in documenting results.’

Across the world, the number of radiological examinations is growing rapidly, but the number of radiologists is not keeping pace.

The artificial intelligence system quickly eliminates images where cancer cannot be detected, thereby leaving radiologists more time to concentrate on those that look suspicious.

Dey says: ‘It’s a great way of concentrating r esources, getti ng patients help faster and making the increased workload of radiologists more manageable.’

A £1,000 investment made a year ago would now be worth about £1,240.

BMO RESPONSIBLE GLOBAL EQUITY

NICK Henderson is co- manager of this £ 588 million fund. Thermo Fisher Scientific is a key holdi ng, i nvolved i n developing a range of healthcare equipment and services including those focused on cancer.

He says: ‘Not only does Thermo provide researchers with a range of breast cancer detection products, but it also offers equipment integral to cancer stem cell and immunotherapy research.’

Over five years a £1,000 investment has grown to £2,000.