The healthcare industry appears poised for significant growth over the next decade, with a multitude of factors contributing to this sustained upward trajectory. Key among these is the demographic shift towards an aging population. As the baby boomer generation transitions into older age, the demand for healthcare services, insurance, pharmaceuticals, medical devices, and hospitals is expected to skyrocket.

Projections indicate robust spending growth in the healthcare sector in the coming years. The Centers for Medicare & Medicaid Services forecasts a 5.6% annual increase in national health expenditures in the U.S. from 2023 to 2032. Similarly, healthcare spending as a percentage of GDP is set to rise from 8.8% to 10.2% by 2030 in OECD countries.

UnitedHealth (UNH): Weathering Short-Term Setbacks

UnitedHealth (NYSE: UNH) stands out as a major player in the U.S. healthcare landscape, offering managed care services and value-based care through Optum. Despite recent challenges causing a dip in its stock performance, including issues with competitor Humana and a cyberattack on its revenue management arm, there are bright spots on the horizon.

The company’s history of robust earnings growth, averaging 17% annually over the past decade, coupled with current valuation metrics signaling a bargain, positions UnitedHealth as a compelling investment opportunity. As the healthcare spending landscape evolves, UnitedHealth is primed to capitalize on the sector’s growth.

Halozyme Therapeutics (HALO): Riding High on Patent Wins

Halozyme Therapeutics (NASDAQ: HALO) saw a significant uptick in its stock price following a recent E.U. patent victory related to its Enhanze drug delivery platform. This win, which extends the patent life beyond market expectations, has bolstered investor confidence in the biopharmaceutical company.

With management raising revenue guidance for 2024 and beyond, Halozyme is on a growth trajectory that is catching the attention of investors. The company’s strategic moves, such as share buybacks and impressive growth rate projections, position HALO stock as an attractive proposition in the healthcare space.

Biogen (BIIB): Navigating the Healthcare Landscape

The Resurgence of Biogen: A Breath of Fresh Air for Investors

Revival After Setback

When the U.S. Food and Drug Administration accelerated its approval of Biogen’s Leqembi for Alzheimer’s, hopes were high for the company. Unfortunately, a struggle with the drug’s launch left Biogen reeling, reflected by the lackluster sales figures that capped off 2023.

A Beacon of Hope

Despite enduring a more than 20% slump in the past year, Biogen’s stock now stands as a bargain too tempting to overlook. Priced at a mere 15 times its future earnings, investors brace themselves for the worst while eyeing Leqembi as the potential game-changer to launch the company back into prosperity.

Emerging Positivity

Bright spots are beginning to shine through the darkness. Recent reports from the first quarter of 2024 revealed a rapid uptake of Leqembi, evidenced by a 250% rise in patients using the drug and a near-tripling of revenues quarter-over-quarter. Additionally, Biogen’s Skyclarys, a drug for Friedreich’s ataxia, showcased an impressive performance, raking in $78 million in global revenues.

Strategic Moves

Aside from advancements in Alzheimer’s research and other niche disease treatments, Biogen’s management has set its sights on reducing costs. The Fit for Growth initiative aims to achieve a net cost saving of $800 million by the culmination of 2025. With these strategic maneuvers in place, Biogen emerges as one of the prime healthcare stocks for potential buyers, given the allure of its novel drugs and cost-saving strategies.