Chronic disease is one of the greatest healthcare problems in America. From obesity, diabetes to hypertension, and heart diseases, these inter-related conditions affect millions of Americans and cost society upwards of $4 trillion per year1. Addressing chronic diseases is a key long term healthcare challenge, acknowledged by the current administration, and is seeing a paradigm shift.
Chronic Disease is a Major Life, Health, and Economic Burden
“Chronic disease has reached crisis proportions in our country, and finally we have an administration that is taking action.”
Robert F. Kennedy Jr.1
For a long period of time, therapeutic companies chose to focus on specialist diseases as these offered higher probability of success, and required smaller trials and salesforces. Within chronic diseases, symptom management dominated at the expense of long-term disease modification. The advent of GLP-1s as the first effective treatment for obesity, a revolution has begun swinging the pendulum back to addressing root causes of large chronic diseases. More companies are investing in primary care salesforces and large chronic disease trial capabilities.
Obesity is just the beginning and simply a point solution. To tackle chronic disease holistically requires addressing adjacencies. Companies are starting to assemble portfolios to build on top of obesity drugs. A prime example is NASH (Nonalcoholic Steatohepatitis) - a progressive disease affecting the liver, is thought to be associated with obesity. Recent acquisitions by Novo of Akero Therapeutics for $5.4bn and Roche’s deal to buy 89 Bio for up to $3.5bn, give these large pharma companies something to add onto their already progressed efforts in weight loss treatments.
Hypertension is another example of an obesity adjacency. With both Roch, via partnership with Alnylam, and AstraZeneca, through a recent acquisition of CinCor, focused here. It seems clear that there is an increased understanding that to truly solve chronic diseases might require targeting multiple risk factors simultaneously.
“For billions of people living with chronic diseases, the path to holistic treatment and care is being defined by emerging science, technology, and collaboration ... Chronic disease management is about more than treating symptoms—it’s about creating lasting change and a different future for patients.”
Sharon Barr, EVP, Head of Biopharmceutical R&D, AstraZeneca3
Paradigm shifts rarely happen in healthcare markets and often mark a key turning point for discerning investors. As pharmaceutical companies look to build holistic and proactive approaches to modifying chronic diseases, a large and attractive investment opportunity is opening up in the decade ahead.
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Some of the companies named in this article may be held in the Tema Heart & Health ETF (HRTS). For a full list of current holdings, visit the HRTS fund page. Fund holdings are subject to change.