‘Un­pre­dictable politi­cians are our big­gest threat’

The Daily Telegraph - Your Money - - FRONT PAGE -

The health­care sec­tor took a sharp hit two years ago when the Amer­i­can pres­i­den­tial race dragged drug pric­ing into the spot­light, but share prices have now sur­passed their pre­vi­ous highs. There are a num­ber of spe­cial­ist health­care funds that of­fer in­vestors ac­cess to the lat­est de­vel­op­ments in drugs, treat­ments and med­i­cal tech­nol­ogy.

The World­wide Health­care Trust, run by Sven Borho for more than 20 years, is a £1.6bn in­vest­ment trust that has made three times the re­turn of its bench­mark in­dex since its in­cep­tion. It has around 65pc of its money in­vested in Amer­ica, with the rest split be­tween Europe, Asia and emerg­ing mar­kets.

Here, Mr Borho tells Tele­graph Money why Alzheimer’s treat­ments are such a con­tentious area and why politi­cians re­main the big­gest risk to the sec­tor.

The sec­tor is spe­cialised and you need a sci­en­tific back­ground to cor­rectly as­sess po­ten­tial. At Or­biMed [the trust’s man­ager] we have 80 in­vest­ment pro­fes­sion­als ded­i­cated to health­care.

The big­gest bi­nary events in the sec­tor are the re­sults of clin­i­cal tri­als in key fu­ture drugs. That’s when share prices can triple, or fall by 80pc.

Even a large phar­ma­ceu­ti­cal com­pany can move by 20pc or 30pc if it’s a key drug for them. This is where sci­en­tific knowl­edge, an un­der­stand­ing of sta­tis­tics and a mod­el­ling of the po­ten­tial out­come are key.

With all our ex­per­tise we should be bet­ter than gen­er­al­ists at pre­dict­ing out­comes, and that has been a key driver of per­for­mance. We have sig­nif­i­cant hold­ings in emerg­ing mar­kets, as those are some of the fastest grow­ing ar­eas – par­tic­u­larly China. A whole wave of next-gen­er­a­tion

CV: Sven Borho

Sven Borho is a found­ing part­ner art­ner of Or­biMed. .

He is the head of the listed d com­pany and nd hedge fund por­tion of the he busi­ness, which in­cludes drugs is be­ing launched, such as the first “CAR-T” anti-can­cer drug last year. This in­volves tak­ing out the white blood cells, en­gi­neer­ing them to specif­i­cally tar­get the tu­mour, then rein­tro­duc­ing them to the body.

The two lead­ers in the field, Kite Pharma and Juno Ther­a­peu­tics, were both ac­quired by large firms over the past year. The tech­nol­ogy is amaz­ing – and just get­ting started.

Gene ther­apy is com­ing of age, too. The first com­pa­nies were go­ing pub­lic in the early Nineties. In De­cem­ber last year Spark Ther­a­peu­tics got the first ap­proval from reg­u­la­tors.

Alzheimer’s is an area that will heat up over the next year. It’s the most con­tro­ver­sial, which I like as it means there is not a con­sen­sus. This presents op­por­tu­nity.

There has been in­ter­est­ing data from big com­pa­nies about a new type of an­ti­body treat­ment. The hy­poth­e­sis is al­most a re­li­gion in Alzheimer’s: you buy into it or you don’t, and sci­en­tists are split. I’m cau­tiously op­ti­mistic, al­though it won’t be a com­plete so­lu­tion.

Health­care is in the po­lit­i­cal cross hairs. James Con­ning­ton speaks to a man­ager who in­vests at the cut­ting edge

Politi­cians are al­ways the big­gest risk, as t they’re un­pre­dictable. Health­care is a al­ways a pop­u­lar agenda item and pol politi­cians aren’t al­ways ra­tio­nal, as the they’re short-term ori­ented.

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