International law firm Simmons & Simmons has today [Thursday 3 October] published new research on how Europe’s largest corporations and investors view the future of the health and life sciences (HLS) sector.
The new report, which surveyed over 700 senior executives and major investors representing multi-billion dollar companies across Europe – uncovers new insights into the latest attitudes on emerging trends in the sector, regulatory challenges and investment opportunities.
The report finds that despite uncertainty with the global economy, respondents overall show optimism about the state of the HLS sector and its capacity for growth in the immediate future: 80% of corporates and 86% of investors expect to see an increase in investment over the next three years.
Three-quarters of the largest corporates are planning HLS M&A activity (72%) and to raise capital (75%) in the next 3 years; while for investors, around two-thirds plan HLS M&A activity (64%) and (67%) to raise capital over the same period.
Other report findings, which reveal views on the impact of technology, ESG and regulation, include:
Investment strategies: Despite an optimistic general outlook in the 3-year term, all corporates cite concerns around growth and investment strategies – with the biggest concern (42%) the gaps between the perceived valuation of buyers and sellers when it comes to HLS M&A and investment deals.
Technology and AI: European corporates cite cloud platforms, AI and healthcare apps as the top three technologies they are currently prioritising – while for investors, healthcare apps, blockchain and smart clothing/wearables rank in their top three technologies for investment. Virtually all respondents (100% of corporates and 99% of investors) had a favorable view of AI – seeing it as positively disrupting the HLS sector over the next two years.
ESG impact: With HLS industry emissions accounting for almost 5% of global emissions, pressure to reduce the sector’s impact is intensifying. All investors stated that the sector featured in their wider ESG investment plans – with 40% favouring ESG-focused thematic investing in HLS to offset their investments: for example, investing in companies promoting sustainable healthcare, widening access to medicines or addressing global health challenges.
Regulatory challenges: All respondents expect future regulations to significantly impact their growth and investment strategies. Corporates cite the EU Pharma package as having the greatest impact, while investors cite ESG regulations, such as the EU’s Supply Chain Directive.
Alexandre Regniault, partner and head of the firm's Healthcare & Life Sciences (HLS) sector group, commented: “This report shows that Europe’s biggest companies and investors are overall optimistic for the future of the health and life sciences sector. The strong vote of confidence revealed from our research comes despite obstacles such as uncertainty with the wider macro economy and the growing complexity of regulations.
“Corporates and investors appear to be willing to confront challenges in the HLS sector due to the vast array of opportunities for innovation. Developments in technology – including AI – are now proliferating at pace and being widely integrated. There is a strong belief from the sector’s major players that they will see growth and returns over the next few years.”
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The full Simmons & Simmons report, “Health Horizons”, is available on request. The report was launched at a conference in Paris on Thursday 3 October.
The Health Horizons conference featured over 25 speakers and 200 attendees from across the sector. Read more info here.
Notes to editors
- This research was undertaken independently by Censuswide for Simmons & Simmons
- Censuswide polled 351 legal professionals and C-suites working in HLS businesses, and 361 investors with portfolios in the HLS sector across the UK, France, Germany, Italy, Spain, Ireland, Belgium, the Netherlands and Luxembourg. Both surveys were conducted anonymously in June 2024.
- Corporates included general counsel, senior in-house counsel, board members and finance directors with the vast majority working in multi-billion dollar companies in Europe in pharmaceuticals, biotech, medtech, consumer health products and healthcare institutions and services.
- Investors included chief investment officers, portfolio managers, assistant portfolio managers, co-portfolio managers, and analysts with the vast majority working in organisations in Europe with multi-billion dollar portfolios.
