The impact of technological advancement and innovation is creating
investable opportunities across the health care system.
While technological advancement within health care may seem innocuous at first, it can have life changing
applications. Companies able to capitalize on the growing need for quality and innovative treatments stand
to benefit. And the demand for such therapies is increasing as the population base ages. For example, the
aging population (60+) is expected to more than double by 2050.1 These trends bode well for companies
able to capitalize on the growing demand.
Investable Theme in Action: Ivy Science and Technology Fund
Zachary Shafran and Bradley Warden, portfolio managers of Ivy Science and Technology Fund, believe
technological advancements in health care are creating investment opportunities.
A closer look at the Ivy Science and Technology Fund
Below are 3 examples of stocks we believe may benefit from rapid evolution of innovation and technology within the
health care sector.
Gilead Sciences, Inc. (GILD)
- GILD is a research-based biopharmaceutical
company that discovers, develops and
commercializes innovative medicines in
areas of unmet medical needs.
- Revolutionary cancer treatment possibilities
- Strong pipeline of products
- Technology with far-reaching potential
GILD is a healthcare name the Fund has been
watching for a long time. The company has a
core pharmaceutical franchise in HIV and
hepatitis treatment, but we believe the company
lacked a new engine for growth and innovation.
With the recent acquisition of Kite Pharma, Inc.,
we believe Gilead has the potential to establish
a new platform for cancer treatments based on
The Fund previously held Kite Pharma, Inc. so
we have high conviction in the new technology
and research and development capabilities Kite's
innovative technology brings to Gilead. As time
progresses, we believe the market will recognize
the potential growth from this new platform and
assign a higher multiple to Gilead’s stock price.
Vertex Pharmaceuticals, Inc. (VRTX)
- Biotechnology company that creates new
possibilities in medicine to cure diseases and
improve peoples’ standard of living.
- Ground-breaking cystic fibrosis treatment
- Strong pipeline of drug therapies
- Accelerating revenue growth
VRTX engages in discovering, developing and
manufacturing small molecule drugs for patients
with serious diseases in specialty markets.
The company focuses on therapies for the
treatment of cystic fibrosis and other early-stage
We believe the company’s revolutionary cystic
fibrosis treatment, shown to significantly
improve patient lung function, will enable the
firm to maintain its dominate market share. As
a result, we believe this will be beneficial to the
company’s top and bottom-line going forward.
IONIS Pharmaceuticals, Inc. (IONS)
- IONS is a drug discovery and development
company, focusing on creating drugs for
patients with severe and rare diseases.
- Extensive drug pipeline
- Strong patent protection
- Innovative drug technologies
The firm was formerly known as Isis
Pharmaceuticals, Inc. and changed its name
to Ionis Pharmaceuticals, Inc. in December
2015. IONS was founded in 1989 and is
headquartered in Carlsbad, California. The
company seeks to create innovative medicines
to save patients’ lives.
We think the prospects for this biotechnology
holding continue to be bright. The company
maintains a broad pipeline of drugs to treat
a wide variety of diseases, and in our view,
the company’s patents provide strong and
extensive protection for its innovative drugs and
technology. When a company is able to create
novel, new therapies with significant positive
outcomes, we believe people will pay for them.
1Source: United Nations.
Past performance is not a guarantee of future results.The opinions expressed are those of the Fund’s portfolio managers and are not meant as investment advice or to predict or project the future performance
of any investment product. The opinions are current through September 30, 2017, are subject to change based on market conditions or other factors, and no forecasts can be guaranteed. The holdings discussed are
for illustrative purposes only and are not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy.
GILD: 0.5%, VRTX: 4.8%, IONS 2.7% of net assets as of 09/30/2017.
Risk factors: The value of the Fund’s shares will change, and you could lose money on your investment. Because the Fund invests more than 25% of its total assets in the science and technology industry, the Fund’s
performance may be more susceptible to a single economic, regulatory or technological occurrence than a fund that does not concentrate its investments in this industry. Securities of companies within specific
industries or sectors of the economy may periodically perform differently than the overall market. In addition, the Fund’s performance may be more volatile than an investment in a portfolio of broad market securities
and may underperform the market as a whole, due to the relatively limited number of issuers of science and technology related securities. Investment risks associated with investing in science and technology
securities, in addition to other risks, include: operating in rapidly changing fields, abrupt or erratic market movements, limited product lines, markets or financial resources, management that is dependent on a
limited number of people, short product cycles, aggressive pricing of products and services, new market entrants and obsolescence of existing technology. These and other risks are more fully described in the Fund’s
prospectus. Not all funds or fund classes may be offered at all broker/dealers.
IVY INVESTMENTS® refers to the investment management and investment advisory services offered by Ivy Investment Management Company, the financial services offered by Ivy Distributors, Inc., a FINRA member
broker dealer and the distributor of IVY FUNDS® mutual funds and IVY VARIABLE INSURANCE PORTFOLIOS℠, and the financial services offered by their affiliates.