Banking

‘Invest in an ageing population’

The population in the US is ageing rapidly. In the latest consensus, the 65-and-older population grew by over a third (34.2% or 13,787,044) during the past decade, and by 3.2% (1,688,924) from 2018 to 2019. Population growth was likely to slow in 2020 as a result of the pandemic, however, it still remains on an upward trend.

Outside of Covid, chronic disease is a significant challenge to this cohort. The percentage of the US population aged 65 or older is projected to reach 23.5% in 2060, which is 98 million people. 

Sales in the medical device industry are expected to grow at a 5.6% compounded annual growth until 2024

ADVERTISEMENT

Today, over 65s number 49 million and around 73% of the population has at least one chronic health condition. In the US, more than two-thirds of all deaths are caused by one or more of these five chronic diseases: heart disease, cancer, stroke, chronic obstructive pulmonary disease, and diabetes.

As a result of ageing populations, global healthcare spending is expected to grow 5.8% to $8.8trn in 2021.

Furthermore, the large contingent of developed countries that have universal health coverage is being joined by an increasing number of developing markets that are establishing and/or expanding universal health care systems, especially in emerging Asian markets, creating more demand for health spending and opportunities for healthcare companies accessing these markets.

By 2050, one in six people in the world will be over  65 (16%), up from one in 11 in 2019 (9%). By 2050, one in four persons living in Europe and Northern America could be aged 65 or over. 

In 2018, for the first time in history, persons aged 65 or above outnumbered children under five years of age globally. Overall life expectancy is projected to increase from an estimated 73.7 years in 2018 to 74.7 years by 2023, when the number of people aged over 65 will be more than 686 million, or 11.8% of the total population.

The rise of MedTech 

Technological advances are revolutionising the medical device industry and strengthening their role in healthcare. Sales in the medical device industry are expected to grow at a 5.6% compounded annual growth until 2024, primarily because of the ageing demographic. The medical device market is diverse and covers a range of sub-sectors, with some areas experiencing significant growth.

With the costs of global healthcare increasing as the population gets older, we want to invest in technologies and medical treatments that create better patient outcomes with more efficiency. 

As a result, we are accessing the ageing population theme through companies such as Medtronic and Edwards Lifesciences.

The latter is a highly focused business, being a global leader in minimally invasive heart treatments. Their innovations are made available to patients in more than 100 countries.

Transcatheter aortic valve replacement (TAVR) represents about 60% of the company’s business, which attracts higher margins and is in a $4.4bn sector that is experiencing double-digit growth.

The company was initially hit hard by the pandemic. Demand for the company’s TAVR devices remained strong (six-month mortality for untreated SSAS is 12%)but hospitals were unable to cope with rising Covid cases and TAVR procedures at the same time. 

However, sales for the quarter ended 30 September 2020 recovered quickly, and came in at $1.1bn, an increase of 4% over the previous year.

Hospitals have learned how to treat Covid patients at the same time as treating TAVR patients. TAVR is now the standard of care, and is taking share from open-heart surgery at an accelerated rate. 

The company has maintained its focus on research and development, with R&D spending equating to 21% of sales. One area that is attracting the focus of Edwards Lifesciences’ R&D efforts is Transcatheter Mitral & Tricuspid Therapies (TMTT). 

This is an area that has significant unmet patient needs: in the US, 4.5 million people suffer from issues related to TMTT and yet only around 2% are treated. This part of the business has the potential to drive significant additional growth, with the TMTT market expanding from $1bn in 2021 to around $3bn in 2024.  

'Invest in an ageing population'

Anu Narula is head of global equities at Mirabaud Asset Management

Most Related Links :
todayuknews Governmental News Finance News

Source link

Back to top button