October 5, 2021 — The COVID-19 pandemic exposed major flaws in the public health infrastructure in the US and worldwide. Across the board, countries were faced with the realization they lacked adequate supplies, personnel, and processes essential to respond to a large-scale public health emergency. In hindsight, it is clear the lack of preparation deserves significant blame for the speed and scale of socioeconomic devastation that has been caused by the novel coronavirus.

As the world’s leaders have begun to reflect on the past 18 months and plan for the future, big money is being put aside to address gaps that COVID-19 has exposed. The US recently unveiled a five-pillar plan focused on modernizing public health infrastructure to effectively prevent, respond to, and contain future biological threats. Preliminary budgets call for $65B in investments to be made over a seven- to 10-year period. Within weeks of the US announcement, the European Commission laid out its own roadmap for building a stronger more connected ecosystem for responding to public health crises.

The JAG research team believes that government initiatives of this kind with both widespread support and significant funding often present attractive investment opportunities. Of particular interest are situations where pro-business policies overlap with independent but related trends that are already providing tailwinds to a particular segment of the market. When applying this framework to recently announced public health initiatives parallels emerge between the priorities of regulators and the problems that health care companies are working to solve. Exciting health care trends the JAG team are watching include:

• Strengthening of supply chains for vaccines, diagnostics, and personal protective equipment (PPE)
• Establishing surveillance capabilities to more effectively identify threats and respond accordingly
• Promoting cutting-edge research focused on monoclonal antibodies, mRNA, and other next generation medicines
• Streamlining and simplifying the regulatory framework that guides the health care system
• Creating incentives that promote health equity and reduce disproportionate burdens on under-served populations
• Adopting modern technologies and standards that simplify data collection, accessibility, and sharing of critical data among stakeholders

As multiple organizations put these priorities in the forefront of governmental and public thought, there’s an impact on for-profit health care companies. For example, as biopharmaceutical companies continue to develop more complex treatments such as cell and gene therapies there has been increased demand for full-service suppliers. Companies supporting the entire lifecycle from drug development through commercialization have become ideal partners. This backdrop sets up extremely well for companies like Thermo Fischer Scientific with broad scale and who are constantly expanding their offering to better support their customers.

JAG’s investment approach helps us identify great companies that can capitalize on durable sector and industry-specific trends and opportunities. We welcome your comments and questions any time!

– Tucker O’Neil, JAG Investment Team

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