Actively Speaking Podcast

Is the Health Care Sector Healthy?

Mar 19, 2025
Tim Wenger, a member of TD's capital reinvestment team, shares expert insights on the healthcare sector's current performance. He discusses why healthcare underperformed compared to IT, highlighting higher utilization and political shifts impacting managed care. Tim also sheds light on the struggles faced by hospitals and providers, alongside the disappointments in pharma and biotech. However, he presents reasons for cautious optimism, such as potential policy tailwinds and the transformative role of AI in drug discovery and healthcare operations.
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INSIGHT

Healthcare Is Not A Single Bet

  • Healthcare is a broad sector with pharma, biotech, devices, life-science tools, and providers, each behaving differently.
  • That diversity explains why the sector underperformed overall despite pockets of strength.
INSIGHT

Multiple Drivers Behind Sector Weakness

  • Different subsegments drove weakness: managed care from higher utilization, hospitals from political fears, and biotech from funding shortages.
  • Life-science tools also suffered as firms worked through pandemic-built inventory.
ANECDOTE

Biotech 'Zombie' Companies Exist

  • Tim notes biotech outside a couple big winners has been muted and the broader biotech index is flat over five years.
  • He highlights ~200 small biotech firms trading below cash and likens many to 'zombies.'
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