Going for growth: health innovation

As with all investments, your capital is at risk

Imagine having a well-trained, well-armed bodyguard who becomes delusional and turns violently against you.

That’s one way to think of ‘autoimmunity’: what happens when the body’s defences mistake friendly tissue as a threat and open fire. More than 100 immune-driven diseases affect millions, including MS, rheumatoid arthritis, Crohn’s and psoriasis.

Understanding and blocking these conditions is now a frontline of medical research. The 2025 Nobel Prize for medicine, for example, rewarded the identification of regulatory T cells, “the security guards [that] prevent immune cells from attacking our own bodies”.

A leader in the battle is argenx, a longstanding International Growth holding that represents a key theme that excites investors in healthcare: the rise of ‘platform-based’ biotechnology. This terminology, mainstream since the 1990s, refers to proven, re-usable biomedical toolkits that save time and money through their applicability across a range of diseases without the need for repeated and often wasteful leaps in the dark.

Founded in 2008, argenx focuses on some of the rare (‘orphan’) autoimmune diseases: chronic inflammatory demyelinating polyneuropathy (CIDP) and generalised myasthenia gravis (gMG). CIDP is a relation of Guillain-Barré syndrome. It occurs when a confused immune system disrupts signals between the brain and muscle. Both diseases cause weak limbs, numbness and a tendency to falls.

The Amsterdam-headquartered company already has a US FDA-approved product, VYVGART, that generated $2.2bn in sales in 2024, helping the company to turn profitable. Its research into new diseases is an extension of its platform discovery: therapies that block the natural recycling of rogue antibodies that keep them doing damage. 

Being the first drug to outwit them has enormous value. Patients with CIDP and gMG were previously compelled to take frequent clinic-based infusions and to suffer the side-effects from less targeted therapies. Now they can inject themselves at home with a prefilled syringe, as VYVGART calms the immune system and lightens the burden of the disease.

Such autoimmunity breakthroughs are just one example of how fast healthcare innovation is progressing at what Steve Jobs called “the intersection of biology and technology.” He saw this point as the most important realm of 21st-century innovation.

A leader in this new generation of drug discoverers, argenx is capitalising on breakthroughs in our understanding of the human genome to have a sustainable impact on how debilitating diseases are treated. There are, of course, no certainties. Biotech platform companies face risks of clinical failures, regulatory delays, competition and pricing pressure. But such companies offer International Growth compelling long-term growth opportunities. As a proven biotech in a highly specialised field, argenx can command high margins, grow its cash flow and strengthen its balance sheet, including through a recent $1.1bn equity raise. It now has $3.4bn to invest in new drug development and in sharpening its commercial operations.

Investing in the enablers

As the pace of innovation heats up in biotech platforms and elsewhere, it also pays to invest in the essential ‘picks and shovels’ of this potential gold rush. Germany’s Sartorius sells the single-use bioreactors, filters, sensors and software that make modern biologics, cell and gene therapies possible at scale.

It’s a leader in technology crucial for the development and production of biologic drugs: the pipes, pumps and clean, sealed vats that allow living cells to be grown safely and reproducibly, along with precision balances and other lab kit.

Sartorius’ products allow customers to start fresh with sterile disposable components, cutting downtime and the risk of contamination. As the world makes more medicines that are grown – not just mixed – we see demand for the company’s equipment steadily rising. Single-use systems save time, are easier to scale up or down, and help keep facilities cleaner and safer. Successful drugs translate into recurring orders. We value the deep, long-term relationships with customers and the culture that helps build them. It bolsters our expectation that the company will ride the biotech industry’s expected 10 per cent compound annual growth rate, a figure likely to be achieved in specialised fields such as biosimilars and cell and gene therapy, which are growing at 15 per cent and 20 per cent respectively.

From the clinic to the salon

Platform drug advances and the toolmakers that aid them are key themes of International Growth’s health pioneers. Another is anticipating the opportunities offered by an ageing population. Galderma is an example of this theme.

The L’Oréal part-owned skincare company’s listing on the Swiss stock exchange was one of Europe’s biggest IPOs in 2024 and the largest Swiss listing since 2017. The company has since freed up resources for investment and is targeting organic revenue growth above 10 per cent over the next decade.

Galderma’s hybrid appeal combines consumer brand power and clinical efficacy. It straddles the line between medicine and cosmetics. As a category, dermatology and premium skincare are expected to grow by about 7 per cent a year, buoyed by an ageing population wishing to hold back that process, and the normalisation of treatments that once seemed scarily clinical – think Botox injections in the face. 

As well as consumer skincare products such as cleansers and moisturisers, Galderma sells quasi-medical ‘injectable aesthetics’ such as dermal fillers and collagen stimulators and prescription treatments for common conditions such as acne. We see a steadily growing visible demand for all the above.

In an area that’s attracted little interest or innovation from drugmakers, we like how Galderma's focus on skin health has pushed steady, practical advances in treatment. As results improve and access widens, more are coming forward for care. The new products aren’t creating demand from nowhere – they’re meeting pent-up needs. Products include nemolizumab, which is gaining traction in treating itchy conditions such as eczema. It alone could significantly boost sales.

Abundant opportunities

Opportunities are multiplying at the intersection of healthcare and innovation. Advances in biology – driven by a deeper understanding of genomics – are being boosted by the power of digital and AI-enhanced technologies. A world away from the binary bets of the past, investing in today’s pioneers demands patient selection of the best platform companies, the essential ‘picks and shovels’ providers, or the specialists with a competitive advantage in areas of urgent need.

These are the businesses most likely to turn exciting scientific step-changes into durable cash flows, through faster development and more efficient manufacturing. With the definition of ‘healthcare’ now being rewritten, our job is to support a transformation leading to better returns for our investors as well as to lives less burdened by day-to-day disease.

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