Our Investor Perception Survey 2017 highlighted key trends around M&A, Investors’ preferred investment profile and investment risk.
M&A
56.3% of respondents thought that M&A will rise in 2017. Many cited the vast cash piles of the large pharma companies: which need to be repatriated. An analysis of the largest pharma companies in the world suggests their is substantial cash on their balance sheets which is available to invest. With a dearth of large overseas M&A opportunities following the closure of some tax loopholes, the expectation is that large pharma will continue to bolster pipelines with smaller, more focused acquisitions.
Investment focus and profile
This brings us to a discussion of investment focus. Investors won’t necessarily invest at all stages of the Biotech therapy development phase or in every fad, but the survey did highlight some interesting investment trends. For instance, most investors, 58.2%, felt that Life Science stocks were currently valued “about right”. This contrasts markedly with the sell-side advisors who mostly felt, 58.6%, that Life Science stocks were undervalued. Could this be one reason for a disparity in fundamental views of the sector between advisors and investors? In particular, advisors often appear to have a more optimistic view of funding opportunities than is evidenced by actual fundraising.
Investment risk
Despite the interesting political times in which we live, investors still see clinical failure as the biggest risk for Healthcare and Life Sciences stocks’ performance. Some did express anxiety about political risk.
Most likely, the results of this survey question are linked to success rates at different stages of development for clinical progress. Most investors feel uncomfortable investing in Biotech assets at the early, more likely to fail, stages of investment. However, this is not the only stage of clinical development in which investors are unwilling to invest. Later stage, phase III and approved products are shown to be less attractive than mid-stage assets. This may be surprising to some commentators. But, a little probing with some respondents and interviewees suggested the reason was the lack of upside value for assets at these stages of development.
Want to learn more about investment trends and outlook in 2017? Purchase our Investor Perception Survey and get:
- The full 28 page report and analysis
- The complete raw data set from the research, fully searchable and customisable for your own analysis (provided as Excel or CSV file)
- A PDF synthesis and table of investor quotes and thoughts drawn from the in depth interviews and matched against key themes
Why purchase the report?
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Gain access to a unique and powerful dataset of investor intelligence
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See what sub-sectors and therapeutic areas are hot in the investor community
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Understand where healthcare investors are allocating their resource and efforts in 2017
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Learn what is truly motivating and driving healthcare investors in 2017
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Understand what healthcare investors think makes a good, investable company and why
Still not convinced? Check out the report summary...
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