Riding a Wave of Biotech Innovation

07 March 2023 by National Bank Investments
Pipette and laboratory flasks

Aging societies and emerging pathogens are contributing to growing global health challenges. Many illnesses are not adequately addressed by medicines today, and accessing effective therapies remains difficult for much of the population worldwide. Treating age-related and infectious diseases are key sub-targets within UN Sustainable Development Goal (UNSDG) 3: Good Health and Well-Being. AllianceBernstein (AB) shares their vision on how investing in biotechnology innovation with a responsible approach can provide concrete solutions to support this goal.

AllianceBernstein’s market outlook

Biotechnology in medicine has accelerated the development of “biologics.” Biologics are types of drugs made from living organisms such as blood, cells, or tissues to create new medications. They differ from usual drugs as they consist of larger and more complex molecules, as opposed to traditional smaller-molecule pills. Therefore, they are mainly delivered by intravenous or injections. Insulin, vaccines, and growth hormones are some examples of biologic medicines.

These types of drugs offer tailored treatments for diseases such as cancer and autoimmune disorders and make up a growing proportion of new medicines in development.

This sustained growth trend in biologics is accelerating thanks to enabling technologies like DNA sequencing and artificial intelligence that are turbocharging new drug discoveries. 

Added value to the strategy

AB’s Sustainable Global Equity strategy invests in the “picks and shovels” providers of large-scale long-term growth trends that are shaping societies and addressing massive social and environmental challenges. The portfolio holds several key enablers for the discovery, development, manufacturing, and packaging of medicines.

For example, Danaher is a leading supplier of equipment used to produce biotechnology drugs at high volumes and levels of quality. ICON PLC provides clinical trial management services that help drugs reach the market more efficiently. 

AllianceBernstein’s approach and vision

AB aims to achieve attractive returns by investing in companies that contribute to positive societal outcomes. Companies offering products or services that help to address the world’s biggest challenges, such as those laid out by the UNSDGs, benefit from investment opportunities in high growth themes and markets. Businesses that act as good stewards toward the environment, employees, and other stakeholders may carry less risk over time.

Case study

Logo of West compagny

Further down the supply chain, West Pharmaceutical Services is a key provider of packaging components for biotechnology drugs, including syringes and injection devices. Many complex new medicines require highly sophisticated packaging to avoid destabilizing the drugs, posing a potential risk to vulnerable patients. As a result of their technical expertise and manufacturing scale, West reports that “virtually all” biologics in the Federal Drug Administration (FDA) pipeline are using at least one of their drug delivery mechanisms or storage solutions. 

West manufactures over 45 billion high-quality components annually. The company strives to reduce the environmental impact from their operations, with specific goals around energy efficiency. West also developed novel injection devices that improve the ease of administering medicine, facilitating patient access to critical therapies.  

SDGs contribution:  

Picture of Good health and well-being

NBI Sustainable Global Equity ETF (NSGE)
NBI Sustainable Global Equity fund
Sub-advised by AlianceBernstein

Why invest in this strategy?

  • Long-term capital growth while following a sustainable approach to investing
  • Capitalize on attractive investment opportunities that have the potential to add substantial value.
  • Will not invest in companies that derive revenue from adult entertainment, alcohol, coal, weapons, firearms, gambling, genetically modified organisms, military contracting, prisons, or tobacco.

Legal notes

The information and opinions herein are provided for information purposes only and are subject to change without notice. The opinions are not intended as investment advice nor are they provided to promote any particular investments and should in no way form the basis for your investment decisions. National Bank Investments Inc. has taken the necessary measures to ensure the quality and accuracy of the information contained herein at the time of publication. It does not, however, guarantee that the information is accurate or complete, and this communication creates no legal or contractual obligation on the part of National Bank Investments Inc.

NBI Funds and the NBI exchange-traded funds (the “NBI ETFs”, together with the NBI Funds, the “Funds”) are offered by National Bank Investments Inc., a wholly owned subsidiary of National Bank of Canada. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of the Funds or the NBI ETF Facts document(s) before investing. The Funds’ securities are not insured by the Canada Deposit Insurance Corporation or by any other government deposit insurer. The Funds are not guaranteed, their values change frequently, and past performance may not be repeated. NBI ETFs units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. NBI ETFs do not seek to return any predetermined amount at maturity.

Views expressed regarding a particular company, security, industry, market sector, future events (such as market and economic conditions), company or security performance, upcoming product offerings or other projections are the views of only AllianceBernstein Canada, Inc. as of the time expressed and do not necessarily represent the views of National Bank of Canada and its subsidiaries (the “Bank”). Any such views are subject to change at any time based upon markets and other conditions, which could cause actual results to differ materially from what AllianceBernstein Canada, Inc. presently anticipates or projects. The Bank disclaims any responsibility to update such views. These views are not a recommendation to buy or sell and may not be relied on as investment advice.

© 2023 National Bank Investments Inc. All rights reserved. Any reproduction, in whole or in part, is strictly prohibited without the prior written consent of National Bank Investments Inc.

® NATIONAL BANK INVESTMENTS is a registered trademark of National Bank of Canada, used under licence by National Bank Investments Inc.

National Bank Investments is a member of Canada’s Responsible Investment Association and a signatory of the United Nations-supported Principles for Responsible Investment.

Categories

Categories