In Sickness And In Wealth

Susannah: Hello and welcome to Switch your Money On from Hargreaves Lansdown. I’m Susannah Streeter, I’m the senior investment and markets analyst at Hargreaves Lansdown. And I’m here with Sarah Coles, our senior personal finance analyst.

I'm here in my pretty dark studio broom cupboard recording this. Hi Sarah, so what have you been up to since our last podcast?

Sarah: Well mainly I’ve been walking round the house turning lights off and asking the children whether they think money grows on trees – so essentially, it looks like I’m turning into my dad. But I can’t imagine I’m the only person glued to my smart-meter at the moment, especially now energy prices have shot up.

Susannah: Yes, all sorts of prices are going through the roof, I paid £3.70 for a takeaway coffee the other day. I almost cancelled the order, but the milk was already being frothed. I tell you, I savoured every sip.

Sarah: I suppose at those kinds of prices it might be a good reason to cut back on caffeine. Actually do you know, maybe Inflation is what I need to start a bit of a health kick – especially given how the price of chocolate is rising.

Susannah: Yes, everyone I know seems to be on a bit of a health kick – whether it’s fit bits or apps monitoring calorie intakes or following gurus on Instagram offering tips on improving diets. In fact I am particularly obsessed by one biochemist who styles herself as the glucose goddess and gives her tips on limiting glucose spikes during the day… not that I do what she says!

Sarah: It’s always great to call yourself a goddess, I suppose she’s certainly not the only person out there selling an innovation in health and wellness. There’s been a huge increase in companies selling these services – as well as big strides in technology and medical science.

We’ll be exploring some of these developments, and taking the temperature of the health sector, in an episode we’re calling 'In Sickness And In Wealth'.

Susannah: To put the health sector under the microscope – sorry I couldn’t resist the pun – we’ll be talking to Dr Patrick Short, CEO of UK health-tech start-up Sano Genetics – which operates in the personalised medicine research space.

Hi Patrick, with so many developments, it’s a fascinating time for the health sector from an investment perspective, does it look as exciting from where you’re standing?

Patrick: It absolutely does and great to be here thank you all so much. It is an exciting time, lots of changes in new technologies, more opportunities to help patients especially those with rare diseases so it’s definitely an exciting time. Although, of course not without its challenges with changes in the stock market and COVID-19 and all other sorts of things giving us as an industry a hard time. But ultimately it has been reciprocating some very welcome changes and clinical trials for medical research more broadly.

Sarah: Thanks Patrick, we look forward to finding out more about developments later in the podcast.

We’ll also be talking to Sophie Lund Yates, our lead equity analyst, who’s been looking at some listed companies in the sector – from pharmaceuticals to those serving the health sector.

Sophie, some of this sector has fallen out of favour slightly since the onset of the pandemic, and in the US, the S&P Health Care index is a fifth lower than the overall index, so are there still some areas of interest?

Sophie: Yes definitely still some areas of real interest and I would be keen to point out it’s not just digital services we need to be looking at, but some kind of bread and butter medical services that could offer some opportunity for investors.

Susannah: Thanks Sophie, we’ll discover more of the details later. We’ll also hear from Emma Wall, our head of investment analysis and research here at Hargreaves Lansdown who has been talking to Olivia Micklem, a fund manager and analyst in Artemis’ US equities team.

And of course we’ll have the quiz too, looking back at some of the oddities of the medical world through the years, including the operation with a 300% fatality rate. But I’m afraid there’s no time for you to try to work that one out Sarah, because we need to discuss those shocking forecasts about a looming downturn for the economy – amid soaring inflation.

Sarah: Yes, as we record this, the new inflation figures are just about to be released, and we already know they’re going to make for some difficult reading. The Bank of England issued its forecasts earlier this month. It’s now predicting it will rise to over 10% at its peak at the end of this year – driven by rising energy bills. This is going to take a terrible toll on millions of people, who face an impossible challenge in meeting these rising costs, and unfortunately the Bank expects wages to fall well behind. We haven’t seen inflation like this in 40 years, so we’re facing the biggest cost of living crisis in a generation.

At the same time, because so much of our money is going to be absorbed by the essentials, it means very little left over for anything else, which is going to hit growth. The Bank expects the economy to shrink in the last three months of this year.

There’s a serious question about how much impact rate hikes can have, when so many price rises are dictated by essentials that we’ll still need regardless. There’s also the issue of imported inflation – particularly from higher oil and gas prices - which is beyond any of our control. However, the Bank can’t just sit on its hands with inflation running so hot, so it raised rates to 1%. It added that the market was pricing in a rise to 2.5% by the middle of next year.

Susannah: It was all looking a lot rosier at the start of this year – with the economy bouncing back above pre-pandemic levels.

But it wasn’t a dramatic increase in output for sectors across the board which lifted the economy above its pre-crisis level.

Instead, it’s the jump in human health and social work activities that is the biggest driver – which pushed the economy back above pre-pandemic levels – in February, with the high demand for extra healthcare services through the pandemic. In earlier snapshots late last year the ONS (Office for National Statistics) highlighted the positive boost that came from a £1.1bn monthly pick-up in the pace of NHS Track & Trace and vaccinations. So you can see the impact healthcare is having.

This is worrying in terms of overall economic output as those effects are wearing off as we come out of the pandemic, certainly in terms of activity surrounding vaccinations. It certainly shows what a driver healthcare has been for the economy.

And long term there is certainly the argument that healthcare will continue to play an increasing role in the economy with ageing populations and ground-breaking new technologies really coming to the fore.

It’s expected there will continue to be breakthroughs in research and development sparked by that engine of investment into finding vaccines and treatments for COVID-19.

Meanwhile, there are all sorts of development from smartphone apps monitoring and helping us understand and manage our health, to artificial intelligence and the role of machine learning in disease and even the role of health in the Metaverse.

There have been medical breakthroughs including the development of novel gene therapies, step changes in the treatment of cancers, innovations that have changed the face of medical testing and of course the ground-breaking work into vaccines. Everything from medical devices to new drugs and new applications of existing medication is constantly under development.

This is a real crossover between innovation and health and is where our guest is operating. Sano Genetics is a personalised medicine research company. Using technology and at-home DNA testing, it's working with global pharma, biotechs and patient groups to try and accelerate genetic disease research, and CEO Dr Patrick Short is still with us.

Patrick, I did a little bit of an explanation, but can you tell me a bit more about the business?

Patrick: I think you nailed it with the description, so thank you and again great to be here.

We started the company in 2017, with an aim to tackle what’s a really big problem in the industry. It takes about 15 years and a billion dollars on average to develop a new medicine. There's obviously a million reasons why this is, but one of the most central ones is that clinical trials and clinical research as a whole is incredibly risky, costly and time consuming to conduct.

So what we developed is a platform which is really focused on personalised medicine research and in particular helping organisations including biotech, pharma and large-scale national precision medical schemes to run these studies in a hybrid and often decentralised way. So that means often completely online, or at home, or at least minimising the amount of time needed to be spent in a clinical trial site, or hospital.

I'm happy to go into more detail here, but really, it's stemmed from a personal experience on both the research perspective, myself and co-founder seeing how difficult and time consuming and expensive it was to conduct these studies, and also on a personal level taking part in research and seeing just how analogue it was.

So these two together are really two of the big drivers behind why this kind of research is, still today, so expensive and, on the topic on inflation, often getting worse year over year how much time and cost it takes to develop a new drug.

Susannah: So, what was it like when you took part in a research project yourself? What did you think? What was your takeaway? And were you there being a guinea pig thinking I could do better here?

Patrick: It's really interesting, so having been on both sides of it both a participant and a researcher you realize that the researchers are really working hard on their side to make new discoveries, but you don't see that often. For the participation side, so there’s a couple of things that are almost universal you often have a very analogue experience, lots of paper, lots of paper forms to fill out, anyone who's been in the hospital waiting room knows this is almost the case across the board, it's also the case in medical research.

A second, and you know really kind of simple, thing is whether you get any information back at all from the research you take part in. So many of the research studies I was part of you submit a sample and then you never hear anything back. And it's not because the researchers aren't working on it, it's just that the infrastructure really isn't in place to automatically and reliably and scalability return useful information back to participants.

So simple things like this are the kind of things we built into the platform, so that when you take part in a research study you instantly get some feedback that's useful and relevant to you and you don't have to pester the researchers to say ''Hey did you ever finished testing my samples?''. Things like that happen automatically in feedback to the participant.

Sarah: So can tell us just a little bit about the technology your developing and how this platform works?

Patrick: Yes, there's two key aspects to it.

One is a software platform that runs really all of the kind of basic operations of taking part in a hybrid of personalized medicine research study. So, learning about the study for the first time through a custom website landing page, consenting and understanding what it means to take part in, what your rights are as a participant, taking the online screening questions and questionnaires and then ultimately taking part in the study. So the software platform is a big aspect of it.

The second major aspect is the at home genetic testing, so it's a non-invasive saliva-based genetic test that allows participants to take part in these kind of studies without ever having to leave their home. And we've applied this to a wide range of diseases, from your neurodegenerative diseases like Parkinson's disease, Alzheimer's, the pandemic to long COVID-19, as well as to immune conditions, like ulcerative colitis and multiple sclerosis. So, it's really a two-fold approach to making this research completely online and at home in many cases and in some cases taking a hybrid approach, where much of the activity is online or at home through the platform and only when needed participants going to a clinical trial site, or hospital, or clinic to take part in parts of the research that really can't be done at home. Things like MRIs or blood samples.

Susannah: How can you verify the data if you're relying on somebody home to monitor it themselves rather than getting a researcher to take the reading?

Patrick: Many of these tests, if they're going to be used in a clinical trial for example, will be re-validated at a clinical trial site with the participant. But for other kinds of research, if it's an observational study where you just really would like to understand what proportion of patients carry a certain genetic marker, there really is no motivation for patients to mislead in that case. So, we know that, generally speaking, people are reliable in taking these tests and from an analytical perspective we've done extensive validations to look at how the saliva tests compare with things like blood. And with a few exceptions it really is a one-to-one comparison, and this hasn't just been done by us but by many other groups. So it is a really important factor to consider, it depends on really the type of research for whether an at home test can be relied on completely itself, or whether it needs to be validated with a second maybe more standard approach.

Susannah: Now you talked about some of the diseases and illnesses that you could help, but are there any new specific treatments that this could lead to?

Patrick: In terms of new technologies that are coming into the market, what I'm most excited about are many of the new gene therapies, gene editing approaches, the opportunity to treat rare diseases, or complex common diseases, that are currently untreatable. This is really tremendous, that's one big area were combining genetic testing to more clearly identify patients that are affected by these conditions or stratify patients into groups. Plus, this new technology is really exciting, but I also think it's important to not discount some of the workhorse technologies, like small molecules, that maybe aren't the new exciting thing from a technology standpoint, but actually there's a lot of really great work that's being done to understand some fundamental biology and then use some of these tried and tested methodologies that use things as simple as small molecules to treat some really complex conditions. So I'm really excited about the new technology, but I think even the existing technology has really important role to play.

Sarah: So obviously there's also potential for the outcomes of this process but in terms of inputs so what's in it for people actually using the technology themselves?

Patrick: There's a couple of big drivers. The biggest one is an opportunity for you, or someone who's in your family, to take part research that could be personally really impactful. So as an example, a clinical trial for many patients can represent an opportunity to receive a treatment that may be transformative for them. It is that it shouldn't be overstated, these are research programs and there's risk that's carried, but for many patients, especially with rare diseases that don't currently have a treatment, a clinical trial is a huge potential opportunity for meaningful change to their life, for their families life.

The second major area is altruism, and we know that many many patients and research participants are motivated by the fact that they may not be able to help themselves directly, but they can help others like them, or they can just help people more generally. So, these are the two really big motivators for taking part in research more generally.

One of the things that we think about is how do we maximize the impact that patients and participants can have, and then how do we minimize the friction that that it takes to take part in. One of the big issues that research has in general, is often there's very little in it for participants maybe simply altruism and we make it really hard for people to take part. But ultimately we need to flip those make it really easy to take part and then deliver a lot of value back to participants.

Susannah: There are though really privacy concerns arent there because many people may not want to share their DNA how do you get over this?

Patrick: Yes, you're absolutely right. This is one of the founding principles when we started the company. We looked around in 2017 and saw that across the industry there really was no way that participants could both take part in research and have really strong guarantees around their data privacy. We felt like this didn't have to be a trade-off, so from the very outset we built the platform so that participants have full control over their data. They can always download their data; they can always take it off the platform and they also have full control over who does and who doesn't have access to it.

I think one of the advantages we have as a relatively young company is that we were able to build this, and from the outside we saw many organisations that struggled mightily to even comply with the basic tenets of GDPR, but we took these as the starting point from the beginning and wanted to ask the question of ''What if participants didn't have to choose between having an impact and having data privacy?'', what would that look like in a modern research platform? So it is an enormous issue, of enormous importance, I think it's only going to grow as something that patients the industry as a whole are concerned about in the coming years.

Sarah: So Susannah touched on some of the sort of exciting things that are going on in the sector at the moment, but what you see as the next frontiers in health tech?

Patrick: There's two major areas I'm really excited about. One is these transformative therapies in rare diseases and in genetic subtypes of common disease. So, gene therapies, gene editing cell therapies, all this new technology, has an opportunity to really fundamentally shift the way we treat diseases that were previously untreatable and I think this is an incredibly exciting. It's going to be really one of the big stories the next ten years. We've already seen a number of incredible breakthroughs in this space, I think it's only going to accelerate.

The second area is actually in using data, and genomic data in particular, for early disease detection and prevention, something we really don't do at a large scale now. But genetics in particular has a really interesting property, they only need to test someone once and it's good for your whole life. You can test for Alzheimer's disease risk factors, you can test for cardiometabolic disease risk, this has to be combined with other conventional risk factors, but it's a really interesting paradigm shift in. I think one of the other exciting trends of the next ten years will be how do healthcare systems start to integrate this technology into something that looks a lot more preventative? It focused on early detection and treatment early rather than waiting until symptoms manifest, so there's a whole lot of work to be done here. A lot of the scientific groundwork has been laid, and the big challenge right now is actually integrating this into healthcare systems in the clinic and seeing how it works in the real world at scale.

Susannah: Certainly is fascinating! Well Patrick, thank you so much for telling us all about it. It's been really great to have you on the podcast and we will be watching how all of this develops with a huge amount of interest.

Patrick: It's my pleasure thank you so much for inviting me to take part.

Susannah: So, let’s bring in Sophie Lund-Yates now - our lead equity analyst at HL. Sophie you’ve been looking at some of the listed companies operating in the sector, what’s caught your eye?

Sophie: Really, I need to mention Smith and Nephew here. I won't go on for long, because I have talked about them before. But as a bit of a recap, essentially Smith and Nephew make components that go in hip and knee replacements, as well as wider medical gear that treats non-urgent elective surgeries and injuries. I think there's room for growth over the coming year as hospitals play catch up on all those cancelled surgeries in the last couple of years, as ever there are no guarantees though.

Susannah: And we can’t really not mention AstraZeneca can we, given how big a name it's become particularly during the pandemic.

Sophie: Precisely, so COVID-19 thrust the pharmaceutical giant, AstraZeneca into the spotlight. As an idea of scale, this is always what I try and do because it’s hard to wrap your head around this, Astra recorded revenue of $11.4bn in just its first quarter. So, it’s truly a massive operation.

AstraZeneca became a household name because of the pandemic, as you’ve mentioned, but because it sold its vaccine at cost during the crisis, it meant revenue benefitted, but it had no bonus for profits. There is a COVID-19 medicine business now which is likely a permanent fixture for the group, with monoclonal antibody treatments trading well. But the main event at Astra has little to do with COVID-19. Analysts are more preoccupied with the group’s acquisition of Alexion. Alexion brings rare disease treatments into the fold. This is a fundamentally attractive area of the pharmaceutical market. Astra’s huge distribution network and Alexion’s specialised drugs is something that makes for a great opportunity.

The reason I refer to specialised drugs for rare diseases as attractive is because there’s a lot less competition for business, developing these drugs is a lot more complex than run of the mill remedies, and because the diseases they treat are less common, there’s less scrambling for competitors to come up with treatments. Being a specialist provider in this way also means you can charge more, which helps margins. It’s an exciting growth prospect but Astra is a complicated beast. The biggest concern for me is that debt levels have crept up to an uncomfortable level, and the valuation is a bit higher than it has been. So overall, Astra is in a strong position, but some volatility is more likely than it was.

Susannah: So let's move on to maybe a company that is focused on the digital nuts and bolts of the health care system.

Sophie: Couldn’t have described EMIS better myself. A lot of people won’t have heard of EMIS, but most of us have inadvertently used its systems. EMIS provides software to GPs and pharmacies, helping them manage practices and keep patient records. Its products have been right at the heart of the UK's coronavirus response. It's Outcomes4Health product was at one point the only system capable of recording vaccines done outside a hospital setting. Other products have also seen demand surge as healthcare services are increasingly delivered digitally, which should translate into a longer-term benefit.

EMIS is on the smaller end of the scale than some companies, it has annual revenues in the region of £170m. The biggest attraction where EMIS is concerned is the majority (about 80%) of revenues are recurring, so done on a subscription basis. That gives great visibility over trading and makes for a more reliable income and profit stream. That in turn feeds into a prospective yield of about 3%, of course no dividend is ever guaranteed.

On the negative side, I have my eye on the fact EMIS is very reliant on the NHS as a core client, increasing the risk of competitors muscling in. That’s being addressed by a strategic shift which will see the private sector make up half of revenues, but until that’s achieved this is the one drawback to what is otherwise a compelling case.

Susannah: You mentioned there Sophie that obviously more services are being administered online, but of course we still do need to go into physical spaces to receive health care as well don’t we?

Sophie: Yes, and this is where I need to discuss Primary Health Properties (PHP).

Clue’s in the name with this one. The group is in the business of purpose-built doctor’s surgeries, which it rents out and earns income from. The pandemic has increased the importance of top-quality primary care facilities, and Primary Health Properties is rushing to meet that demand. There's a healthy pipeline of enhancements to the existing estate and new facilities lined up, potentially securing revenue growth for years to come. As a REIT (real estate investment trust), PHP has to pay out the vast majority of profits as a dividend so that should ultimately feed through to investors' pockets, and the group has an impressive 25+ year track record of growing the dividend, although of course, as I’ve already said, dividends are variable and there are no guarantees. This should not be seen as a guide to the future.

We don’t view PHP as a high growth stock. Instead, we feel it is more income focussed. The valuation of 21 times expected earnings is below the longer-term average, but hardly in value territory, so ups and downs in the market’s assessment of the company are possible.

Sarah: Thanks Sophie. There’s clearly an awful lot going on in every corner of the sector.

Now I’d like to bring in Emma Wall, our head of investment research and analysis here at Hargreaves Lansdown. She’s been talking to Olivia Micklem, a fund manager and analyst in Artemis’ US equities team.

Emma: Hi Olivia.

Olivia: Hi Emma.

Emma: Lovely to talk to you again. We're here today to talk about health care stocks and pharmaceuticals. Traditionally an area that has held up quite well, of course there are no guarantees, and has been quite defensive. But that's not been the case recently has it because there's just been so much volatility in the market.

Olivia: Absolutely Emma. I think from where we sit, what we're seeing in the larger pharmaceutical companies, they are behaving as we might hope. Holding up relatively well in the volatile market, but equally you know we're still relying on pharmaceutical companies releasing data on that drug trials that can always add an element of uncertainty into those companies. So, whilst they are fairly defensive in the long run, you do have to deal with some uncertainty. As you move down into the smaller end of the pharmaceutical industry, down to the biotech’s, that has certainly been an area of extreme volatility, very much to the downside as we sit here now coming off the back of several years of fantastic funding, a lot of IPO activity we're really seeing a real pull back in that space. Which is a shame because really that's where there's a huge amount of innovation and excitement coming in terms of new molecules.

Emma: And I think that's a really interesting point about innovation because, putting the market volatility of 2022 aside, the previous two years health care stocks and pharmaceutical stocks have been very much in the headlines. I'm talking of course about vaccine development associated with COVID-19 and the pandemic. It's really been an area that's had a lot of focus from retail investors, who potentially weren't so aware of it before.

Olivia: I think what the pandemic really brought to light is the importance of the amount of spending that this industry does on deep clinical research. What we all found as we move through the pandemic is there's a huge amount of background that was already done in the region of virology. We were then able to very very quickly, as everyone saw, develop very effective vaccines. We now also have an effective treatment drug from Pfizer that that people can take once they've been exposed to the virus. I think it's a really exciting time for the industry because I think it's really justified huge amount of the of the spending, of the work, of the business models, in that industry. I think we are now seeing a real tailwind from that shift in terms of spending, behind R&D spending, behind academic research, clinical research, I think it's a really exciting time for the industry.

Emma Wall: Now you’re a professional, you look at specifically US companies all day every day, this sector is one which, as you just noted yourself, is pretty complex - how do you begin to analyse companies like these unless you are a double doctor yourself, you know with several degrees in bioscience?

Olivia: We try very hard to use our risk-based approach to really see where the opportunities are. As you acknowledge, you know, I don't have a medical degree, I'm not a pharmaceutical scientist, I'm not a biologist, but I do understand the key drivers of the overarching industry trends, combined with what makes a business successful and what doesn't and we put that all together into our framework and look at, if everything goes well for this company, what do we think we should be paying for it? If everything were to not go so well for this company, what's our downside risk? But ultimately for us what matters is the valuation of the companies, the market price, and where the opportunity lies to capture the upside with the appropriate downside in place.

Emma: Looking then at those opportunities, you have a couple of stocks in the portfolio at the moment, that's the US smaller companies fund, perhaps you could talk us through those stocks specifics and why you like them.

Olivia: In line with the trends, we just talked about, particularly in drug research and development, we own a company called Syneos Health. This is what's known as a contract research organization and what that really means is they are responsible for helping the drug companies create run and manage the trials that are required as part of drug development. So, you know any drugs has to go through a series of regulatory trials to assess, not only how effective the drug is, but how safe it is and whether or not it should be approved. These trials are very very complex, they involve huge numbers of patients, they involve an awful lot of data, administering of drugs, real drugs, placebo drugs, across multiple locations, geographical regions, age groups, and that's a very complex thing to do. What we've been finding, what's been a long-time trend for the industry, is all sized pharmaceutical companies from the very large ones, all the way down to small biotech, want to outsource this. They want to get someone else who's got better expertise and a better infrastructure, rather than having to make that investment themselves and that's where the CROs come into play.

Syneos Health traditionally was always very very successful in the kind of middle market, so mid-sized biotech companies. Through some acquisitions they started to move down the spectrum to some of the smaller companies and then through some of their own internal innovation, they have developed more service lines and a more comprehensive offering of products, to be able to offer things to the larger pharmaceutical companies as well. We're really seeing that benefits start to come into their business performance, we're seeing the backlog which represents the number of agreements they have in place with different pharmaceutical companies, that backlog's been growing really really nicely.

In addition they have another business line which helps with the selling of the drugs, so once drugs are approved, how do they get into the marketplace? How do they reach the right patients? Reach the right doctors? And again, it's an area where the pharmaceutical companies want to be able to outsource some of that business. Syneos have done a really really good job of becoming a real player in that market.

Again, we're seeing really nice growth in the agreements, and then what you're starting to see is the ability to cross sell between those two segments, so really offering a pharmaceutical company a real end-to-end service with a single provider, from the beginning of the initial research process with a particular drug, all the way through to getting that to the right patients. So, we really like how that's been performing. When we got involved initially, we really liked the risk reward profiles and we're really excited to see how they can continue to kind of drive growth the top line by winning more and more customers. In addition they've got some great work going on in order to improve their cost base and we're seeing really nice margin progression.

Emma: So, looking then at the sector, because of course there are no guarantees, what are the risks that you're thinking about with healthcare and pharmaceuticals? Do you have to think about political risk? I mean does it matter who's in the White House? How does that affect the sector?

Olivia: Absolutely, what you see particularly in the US, is it's a huge private market, as we know the healthcare system not like we have it in the UK. So, what you have to deal with these 'who's paying for that care?' at any given point, is it the government payer? If you're elderly or you’re low income you receive your care through the government, much like the NHS. But if you're not in either of those buckets, you have private insurance that arrangement means there's a lot of different people involved in who is responsible for paying for care at a given point in time and as a result you can get different pressures from whether or not a particular insurer wants to pay for particular drug, or doesn't, or whether the government wants to pay for particular drug, or doesn't. So that's something we have to monitor very carefully.

Historically, the drug companies have often come under scrutiny for their prices, are prices too high? Now, unfortunately, the way that the conditions that are being researched have developed is we're getting more and more complicated conditions, more and more complicated drugs required, and unfortunately that comes at a greater expense. But that hasn't stopped some scrutiny legitimately being placed on the pharmaceutical companies. I do think what we're seeing, and I think the pandemic really showed us that, is actually these drugs are priced for a reason in order to help fund further research. The drug companies are in a better position than they have been historically to justify their business models, nevertheless, it will always be an area of discussion and it's always something that we factor into how we think about valuing these companies in order to make sure we reflect that risk appropriately.

Emma: Oliva, yes thank you very much.

Olivia: Yes, thank you so much Emma.

Susannah: Well, that was Emma Wall, talking to Olivia Micklem, the fund manager and analyst in the Artemis US equities team.

You’re listening to Switch your money on from Hargreaves Lansdown. And please bear in mind that those were the views of the fund manager and are not individual stock recommendations.

Susannah: OK, now Sarah it's time to move on to the quiz and I’ve been doing my research as usual.

Sarah: Although, in this case, it’s research into some of the odder things lurking in the history of medicine.

I have to say, I’m already worried about this one.

Susannah: I think you should be, because some of it isn’t pretty Sarah and I'm just going to warn you now. You’ll remember I asked you about the operation with a 300% fatality rate, so my first question is, what do you think caused it: was it over-enthusiastic amputation, a patient who got angry or a wayward application of medication?

Sarah: I haven’t a clue. They all sound quite frightening, But I know those early amputations were grisly, so I’ll opt for that one.

Susannah: You’re right. It was an incident in the life of Robert Liston, who gained fame and fortune as one of the most successful surgeons of his time – which was the mid-1800s. Back then, without anaesthetics, surgery was a quick and brutal business done in front of an audience of medical students. One of whom would be summoned to hold the patient down. In this particular case, Liston was in such a hurry to remove a lower leg that he accidentally cut off the fingers of his assistant, and both the patient and the assistant died of sepsis. The third death was the student onlooker who died of shock.

Sarah: That’s really horrible.

Susannah: Sorry, that one was a bit grim, and apologies to anyone eating right now, but we’ll go for a second slightly grizzly question. Which of the following creepy crawlies isn’t directly used in medical treatment, is it leeches, magots or spiders?

Sarah: They all sound disgusting, but I thought leeches was a medieval things, so I’ll say leeches.

Susannah: No, oddly leeches are still used for bloodletting in some specific surgical cases, such as when there’s a build-up of it in very small veins after surgery. Maggots can be used in certain types of wounds, which I won’t go into detail about, but it involves dead tissue. And although there’s some research underway into the healing potential of spiders’webs, the spiders themselves are out of the picture. I know it's not a medical procedure but I have actually had fish nibbling my feet, apparently it was for pedicure it wasn't medical but I did have to try out it was in an airport once and I must admit I wouldn't do it again.

Sarah: Well that’s my nightmares sorted for the next few weeks.

Susannah: Alright, I do have one more slightly less grim cure coming up. Alexander Fleming famously discovered Penicillin when clearing out old petri dishes in St Mary’s hospital and discovering one, with a blob of mould on it, had killed the bacteria. The name of the wonder drug eventually came from the mould family it belonged to, but he initially came up with his own name for it, but was it, was it The Magic Bullet, St Mary’s Mead, or Mould Juice?

Sarah: It doesn’t sound like any of those, although I’m pretty sure St Mary Mead was where Miss Marple lived, so I’ll say The Magic Bullet.

Susannah: No, it was the much less attractively named, Mould Juice.

Right, now back to the slightly grizzly I’m afraid. During the Black Death, there was all sorts of cures that people decided would ward it off or stop it in its tracks, but which of these potential cures have I made up. Did people try and strap a live chicken onto the affected area, did they drink a potion they were told was made from powdered unicorn horn, or did they sit next to an open sewer.

Sarah: Oh blimey, they all sound like you’ve made them up, but surely nobody would think sitting next to a sewer would be a good idea, so I’ll go for that one.

Susannah: No, I’m sorry you’re wrong. I’m afraid it was a bit of a trick question because they were all thought to be potential cures.

So after a strong start, I’m afraid it was two out of four again.

Sarah: If I can get the thought of those creepy crawlies out of my head I’ll count it as a win.

Susannah: Yes, sorry about that. It was a bit of a grim way to end the podcast. But thankfully we've also talked about all the innovations taking place, so we don't just need to rely on these creepy crawlies in the future.

But that’s all from us this time, but before we go, we need to remind you that this was recorded on 16th May 2022, and all information was correct at the time of recording.

Sarah: Nothing in this podcast is personal advice – you should seek advice if you’re not sure what’s right for you. Investments rise and fall in value, so you could get back less than you invest. Past performance isn’t a guide to the future.

Susannah: Yes, this 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.

Sarah: And this hasn’t been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication.

Susannah: Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing.

Sarah: You can see our full non-independent research disclosure on our website for more information. So, all that’s left is for me to thank our guests Patrick, Olivia, Sophie, Emma, and our producer Elizabeth Hotson.

Susannah: Thank you so much for listening. We’ll be back again soon - so if you enjoyed this podcast please do let us know what you think and do subscribe wherever you get your podcasts so you get a fresh new episode in your inbox as soon as it’s ready. Goodbye.