Healthcare has always been known as a sector resilient to downturns, as people will fall ill and seek treatment regardless of the state of the economy. Within healthcare itself, there are many sub-segments such as hospitals, clinics, pharmaceuticals, and biotechnology, just to name a few. Each sub-segment of healthcare has its own strengths and weaknesses that investors should evaluate before they decide to invest.
SGX has data on the three best-performing healthcare stocks as of 14 May 2019, and these were: Biolidics (+27.3%), Haw Par (+25.0%), and iX Biopharma (+18.0%). All three have averaged a total return of 23.4% over the period. These three stocks could be the ones to supercharge your portfolio and deliver stellar returns. Let’s take a closer look at each company’s business.
Biolidics Ltd (SGX: 8YY) is a medical technology company that focuses on the development of cell enrichment systems, which have a wide range of applications for cancer diagnosis, prognosis, treatment selection, and treatment monitoring. The company was listed in December 2018 on the Catalist Board.
Biolidics has developed and commercialised the ClearCell FX1 System, a medical device that relies on a novel patented technology to separate and enrich cancer cells from blood. The company is now embarking on marketing efforts to further commercialise this technology in order to contribute to cancer research, and it has just announced a strategic collaboration with Sysmex to jointly collaborate and develop laboratory assays in the field of circulating tumor cells.
According to the company, the potential for their technology is significant in China as the market there is estimated to grow from US$195.4 million in 2019 to US$499.9 million in 2023. Biolidics’ laboratory partner in China is offering Laboratory Developed Tests (LDT) using the ClearCell FX1 System, and demand is expected to continue to grow.
Haw Par Corporation Limited
Haw Par Corporation Limited (SGX: H02) is a conglomerate with diverse business interests in healthcare products (through its Tiger Balm brand of ointments and plasters), leisure (it owns an aquarium attraction in Thailand), property, as well as investments.
Its healthcare division is the fastest-growing division and has seen sales and profits increase over a multiyear period. This signals good growth prospects for Haw Par, and its investments in both United Overseas Bank Ltd and UOL Group Limited underpin the company’s healthy investment cash flow, which contribute to steady dividends throughout the years.
IX Biopharma Ltd
IX Biopharma Ltd (SGX: 42C) is a specialty pharmaceutical and nutraceutical company with facilities in Australia for drug development and laboratory testing as well as manufacture and supply.
The company’s pipeline of products under development include Wafermine and BnoX for pain management. Two drugs for the treatment of erectile dysfunction in men, Wafesil and Silcap, have already been registered in Australia. The nutraceuticals division, Entity Health, develops products used to improve the overall quality of life and is stepping up with marketing initiatives to further expand its sales reach.
The Foolish takeaway
Of the three companies, Haw Par is the only profitable one. iX Biopharma and Biolidics are still in the process of monetising their bio-technologies and discoveries and are currently still spending significant sums on research and development as well as marketing. Investors may wish to look at the potential of each company’s technology and discoveries as it is common for early-stage pharmaceutical and biotechnology companies to lose money.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. Motley Fool Singapore contributor Royston Yang doesn't own shares in any companies mentioned. The Motley Fool Singapore has recommended shares of Haw Par Corporation Ltd and United Overseas Bank Limited.