Biotech 360° – Year’s Favourites 2022

How we chose our Year’s Favorites

U.S. biotech companies make up the bulk of most sectorial investment funds, but life science tools & services and innovation from China are gaining traction. Tools & services improve the industry’s efficiency while China is an increasingly important hub for innovative drugs.

  • We decided to overweight Manufacturing outsourcing services (CDMO), AI for drug discovery and innovation from China.
  • Our three year’s favorites were thus Catalent as a leading player in the CDMO space, Schrödinger as a pure player for AI in drug discovery, and Innovent as the first Chinese innovative drug maker tackling the U.S. market.

What did not work

The Chinese and AI exposure underperformed. Despite solid sales and pipeline advancements, China was rocked by regulatory uncertainties that impacted the biotech sector. AI adoption in a low digitalized industry is much slower than expected despite big moves from major players (Google, Baidu, Sanofi..).

  • Contribution to the Year Favourite performance: Innovent -0.32%, Schrödinger -1.79%.

What worked

Emerging Biotech kept outsourcing to stay lean. Staying lean is imperative to maintain a strong R&D investment link to bringing new tech on the market. 2021 Covid dynamics particularly favoured genetic drug manufacturers and enabled them to fulfill drug supply contracts, an impossible task for biotechs on their own.

  • Contribution to the Year Favourite performance: Catalent +0.95%.

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