By Todd Shriber via Iris.xyz
Disruptive, evolutionary and innovative are adjectives usually reserved for the technology sector, but advisers and investors ought not to sleep on the ability of the healthcare sector to wear those labels.
In fact, healthcare innovation is a credible investment theme. It is here today, rapidly growing and increasingly accessible via various investment vehicles. One definition of healthcare innovation is “the implementation of new or altered products, services, processes, systems, policies, organizational structures, or business models that aim to improve one or more domains of health care quality or reduce health care disparities,” according to AHRQ Health Care Innovations Exchange.
Many of the exciting investment opportunities in the healthcare innovation space are mid- and small-cap companies that do not have broad Wall Street recognition on par with an Amgen or a Johnson & Johnson.
Take the case of ABIOMED, Inc. (ABMD). The company has a $17.35 billion market capitalization (as of May 23rd), putting it in mid-cap territory. Shares of the Massachusetts-based provider of heart recovery and support technologies have nearly tripled over the past 12 months, rising 193.54% (as of May 23rd). Importantly, ABIOMED’s results are strong.
For the recently completed fiscal first quarter, ABIOMED said revenue rose 40%. For fiscal 2018, revenue increased 33% while operating income soared 74%.
One of the reasons disruptive technologies are compelling is that one is often linked to another. For example, healthcare innovation and the companies in this space do not operate in vacuum. Rather, they have links to and potentially growing relationships with other purveyors of disruptive technologies, including 3D printing.
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