Why You Should Invest in Life Sciences
by Mashum Mollah Investing Published on: 28 December 2018 Last Updated on: 01 June 2022
LIfe sciences are crucial to human survival and quality of life. The term “life sciences” is incredibly expansive, including fields such as pharmaceuticals, biotechnology, food chemistry, cell biology, nanotechnology, and more. Investors like Cody Moxam know that as an industry, life science one of the most innovative—and one of the most necessary.
From an investor’s point of view, the life sciences industry is also one of the most rewarding. While it is admittedly high-risk, the potential to have a hand in developing a revolutionary treatment or technology that makes life easier for people around the world has both moral and financial perks. As brilliant as scientists and doctors are, they cannot save the world alone; they need outside investors to help fund their ideas and research into things like zombie cells. Don’t let the risk deter you from investing in life science projects—you could be the one who made it possible for someone else to discover the cure to cancer or make life more manageable for people with mobile disabilities.
Australian company AusBiotech reports that investors choose life science sectors for reasons including the possibility of tremendous capital growth, benefit to the public, to diversify a portfolio, the demand for high risk and high reward investments, and “the fact that equities in life sciences are less affected by broader economic conditions than are equities in some other sectors.” Biotechnology, medicine, and other fields are all vital and booming industries, so here are a few reasons to consider investing in life sciences:
People need it to live
Why should you invest in life science? Because people need it to live. It’s as simple as that. Without treatments, medications, and equipment, countless people will die. It sounds dramatic, but devices like insulin pumps are essential for many people with diabetes and vaccinations prevent people from contracting dreadful diseases. As long as people fall sick and age, there will always be a demand for such products, so investors need not worry about the industry becoming obsolete. What will become obsolete, however, are outdated and inefficient treatment methods, so practical investors make a point to stay alert for new research and ideas?
Investors can also exercise whatever influence they have over product prices. The cost of the top 20-selling drugs, for instance, is three times higher in the United States than in the United Kingdom. The manufacturing process is not expensive, but American companies seek to make higher profits off of life-saving medicines. While requesting lower prices as a condition of investment won’t return you as much money, consumers aren’t going anywhere, and it’s the ethical thing to do.
It requires a significant amount of money
Developers cannot create and offer revolutionary products, however, without proper funding—nor can they expand on their ideas and improve modern medicine even further. Managing general partner at Frazier Healthcare Partners and Stanford biophysics Ph.D., Jamie Topper, says:
“…the big difference between biotech and consumer is that biotech companies need hundreds of millions of dollars if they’re going to keep their products moving toward commercialization, versus [a] consumer [startup], which may need $20 million. So when there’s an open capital market and you need to access money, that’s most easily done in the public markets.”
Many life science companies are public because of how much money they necessitate—but that does not mean that it’s worth leaving viable projects to go unfunded. True, it can be difficult to discern which projects will fail or disrupt the practice of healthcare, but leaving investing in biotechnology and pharmaceutical development to a vague “someone else” is not something that humanity can afford.
The market is healthy
There is remarkable growth potential in biotechnology. While not every invention proves successful, those that do meet a desperate market upon commercialization (as long as the price is affordable, of course). HealthTech Zone notes that the overall market is performing well—and it also makes an excellent point that the world is never in short of a demographic that needs life science products: the elderly. The demand for drugs rises as people age, and it is projected that there will be around 98 million older persons living in the US by the year 2060.
The life science industry is a wide-encompassing field that certainly poses its risks—but it’s also an essential one, so investors would be practical to take advantage of a constant (if not growing) market. Will you invest in life science products and research?
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