When the dust settles on the Covid-19 crisis, things will be different, and among the big differences will be the rise of healthcare and health-tech, the surge in the AstraZeneca share price illustrates this.
As AstraZeneca becomes the UK’s biggest company, is it time to invest in healthcare?
Before Covid (BC), or before the Covid epidemic (BCE) there was Fintech. Startups promised to change the world by creating banking apps.
Others promised to change the world by delivering food. Together they made life a little easier, but they didn’t change the world. Marketeers embraced AI and thought that by doing so, they would sell more of their products. Instead, their rivals embraced AI too, the result was a kind of marketing arms-race. Those that understood AI became better off, but I am not so sure society benefited by that much.
BC, or BCE, we saw the rise of BS jobs. That’s jobs that do not provide anything of any social value. Often these jobs were well paid.
During the Covid crisis we have been finding that jobs that do provide social are often quite poorly paid. Whether it be nurses, carers or refuse collectors, without these jobs, society will be poorer. Yet so often the people who do these jobs are poor.
After the disease (AD), attitudes may change. We may (let’s emphasise the word ‘may’) ...we may see the emergence of a world that puts greater value on what really matters.
Of course, I may be a victim of recency bias, or the ‘tyranny of the moment’ — where we put undue emphasis on recent events. Whenever a radio station plays the most popular songs of all time, according to a survey of listeners, there is always a disproportionately high number of songs released over the previous two years. When that same radio station runs another survey, five years later, the ‘new releases’ of the previous chart are gone, they are replaced with songs from the latest two-year period. That is what I mean by the ‘tyranny of the moment’. It is possible that AD, things will go back to what they used to be like. The mood of our current times will be forgotten.
Yet in one respect, Covid will create a permanent shift — the acceleration of digital. Across the world both business and consumers are being forced to adopt more digital technology. AD, some of this enforced change will stick.
And no-where is this shift more obvious than in healthcare and health-tech.
The pharmaceutical companies
I was following a debate over the weekend concerning AstraZeneca — the UK pharmaceutical company. The company has become the biggest FTSE 100 firm by market cap. A part of the interest in AstraZeneca relates to its link with developing and manufacturing a Covid-19 vaccine.
But if this pans out, I don’t expect the company to make much profit from this. A Covid-19 vaccine needs to be a non-patented, public funded project. It requires funding from governments across the world and the product of this funding should not make a profit. Any attempt to make such technology proprietary would in my view be a crime against humanity. (On that topic I hope this story in the Guardian is a gross distortion of the truth: US and UK 'lead push against global patent pool for Covid-19 drugs’.
But I think pharmaceutical companies along with a host of other companies operating in health-tech are about to enter a golden age.
In some cases, Covid-19 has directly accelerated this shift — for example pushing the adoption of telemedicine.
But I think there is an even wider point.
AI is now sophisticated enough for it to be employed in the war against disease. By drawing insights from anonymised data, (meaning we have data, but we don’t know who it relates to) AI will be able to create insights that can transform lives, increasing longevity and simultaneously improving the quality of life.
If the AI revolution BCE didn’t so much change the world as make experts in AI rich, post Covid —AD — it will save lives and create truly positive benefits.
The pharmaceuticals, the likes of AstraZeneca (shares up 13 per cent this year, and now with a market cap of £113 billion) and little GSK (market cap £82bn and shares down this year) will be among the beneficiaries.
What we can say is that right now, it appears AstraZeneca was right to shake off the overture from Pfizer six years ago — shares have doubled since then. I also think GSK looks a little forgotten. I don’t think that investors should forget it.
These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees