A spotlight on healthcare

Rising valuations in healthcare stocks have led to fears of a bubble. Newton's Stephen Rowntree outlines the fundamentals which support valuations.

We have seen many large pharmaceutical companies successfully navigate the ‘patent cliff' of key drug sales losses, and we are now watching the first signs of how these companies can deliver future growth through successful design and development of new cost-effective treatments. Valuations have risen amid this strengthening sector confidence. The healthcare bears would question the ability of company pipelines to deliver successful treatments, but we are confident we should be able to distinguish companies with true growth and innovation potential from those with less attractive prospec...