In times of geopolitical instability, essentials like healthcare companies can be useful for those looking to improve the resilience of their portfolios. High barriers to entry and exposure to favourable demographic trends are some of the sector’s key attractions.
Financial performance so far this year has been better than expected, which contrasts with a downturn in investor sentiment. This suggests that overall, companies are deftly navigating regulatory pressure and funding cuts.
A key focus for investors has been the astonishing commercial success of GLP-1’s – or weight-loss jabs – a revolutionary treatment for conditions like obesity and type 2 diabetes. However, there are still large and untapped opportunities elsewhere.
So, we’re looking at three companies we think are well placed to deliver a different kind of value for patients and shareholders.
This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments and any income from them will rise and fall in value, so you could get back less than you invest. Ratios also shouldn’t be looked at on their own.
Investing in an individual company isn’t right for everyone because if that company fails, you could lose your whole investment. If you cannot afford this, investing in a single company might not be right for you. You should make sure you understand the companies you’re investing in and their specific risks. You should also make sure any shares you own are part of a diversified portfolio.
Novo Nordisk – overlooked rare disease division
As one of the trailblazers in the weight-loss jab market, Novo Nordisk might come as a surprising mention. The sheer scale of its diabetes and obesity care franchise eclipses the group’s rare disease franchise, which made up just 6% of revenues last year. But the division is sitting on some exciting opportunities, and we see it as a welcome source of diversification.
Rare diseases, by nature, usually face less competition and offers significant incentives for developers looking to reach underserved patient communities. These can include accelerated approval pathways, significant exclusivity periods and attractive price premiums.
Strong sales growth for Sogroya, a once-weekly growth hormone, underpinned 24% sales growth in rare endocrine disorder medicines last year. With three additional US approvals this year, there could still be better to come.
Blood disorders like haemophilia make up most of Novo’s rare disease sales, and its experimental treatment, Mim8, has shown some exceptional clinical results. It’s awaiting regulatory clearance – for which there is no guarantee – but estimates see a revenue opportunity of up to $3bn. And that’s not a drop in the ocean for Novo. The group’s also planning to seek approval for etavopivat this year, a promising treatment for sickle cell disease with a market opportunity of around $1bn.
Any investment in Novo, however, still needs to focus on the outlook for its weight-loss therapies. Here, it’s been somewhat outplayed by US rival Eli Lilly, but there are signs that it’s clawing back some ground. More momentum is required to drive sustainable upside in the valuation from here.
Intuitive Surgical – making surgery safer
From the introduction of anaesthesia through to joint replacements and organ transplants, advances in surgery have provided some of the biggest single leaps ever seen in human healthcare. We think that robotic surgery, which takes precision to a new level, represents a similar step change in surgical capability, delivering reduced complication rates and a lower overall cost of care.
Intuitive Surgical leads the market, and although adoption is rapid, we think there’s still a big opportunity to go for. 3.2 million surgical procedures are already carried out annually on Intuitive’s platforms, with an opportunity around three times that size based solely on established use cases.
The total addressable market looks significantly larger, and Intuitive is making good progress for approvals for use in new clinical areas. Headwinds to expansion include competitive threats, tariffs, and lower demand for some procedures following the boom in anti-obesity medicines.
Although the technology has now been around a while, innovation continues at pace, with $1.3bn spent on research and development in 2025. Intuitive’s market dominance provides access to large and unique datasets, from which the addition of a layer of artificial intelligence (AI) is driving further developments like remote surgery and automation. However, there’s no guarantee of commercial success.
So far this year, Intuitive’s delivered strong revenue growth and margin progression, and we see potential upside to forecasts if momentum is maintained. Market leadership in fast-growing markets commands a premium valuation, one that we think is well-merited. On the flip side, that also means the market’s reactions to potential disappointments in the future are likely to be on the harsh side.
IQVIA – leveraging data in healthcare
As the world’s largest contract research organisation, IQVIA is a trusted partner to the pharmaceutical industry. Between 2016 and 2023, it was involved in the development of 73% of all medicines approved in the United States. Patient recruitment, site selection and regulatory submissions are all part of the service.
Although growth in the global pharma pipeline has ground to a halt, the pivot towards more advanced therapies means that demand for specialist providers is strong. That’s reflected in IQVIA’s record Research & Development Solutions orderbook, last reported at $34.2bn. Meanwhile, the complex and highly regulated nature of clinical trials creates high barriers to entry.
Data analytics is pivotal to IQVIA’s business model. Its real-world data sets span 1.2 billion patients and are the largest proprietary collection in the industry, something we see as a valuable asset. That enables the company to derive revenue streams from a greater part of the drug lifecycle, helping customers with their go-to-market strategies.
Commercial Solutions is now the fastest-growing part of the business. IQVIA’s data-rich activities lend themselves well to AI, promising to reduce drug development timelines and improve commercialisation. It’s also helping healthcare providers like the NHS improve patient outcomes and reduce costs.
IQVIA’s leaning hard into AI and is seeing widespread adoption of its newest innovations. We see this as an opportunity. However, in common with other industries, concerns about AI disruption have been weighing on investor sentiment, even while financial forecasts have been going up. We think this has been overplayed and see more opportunity than threat from AI. However, markets may remain sceptical and will need to see more evidence that IQVIA is moving with the times.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss. Yields are variable and not guaranteed.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment.