Healthcare costs could skyrocket for society as a result of an aging population
However, astute investors can take advantage of new treatments.
David Attenborough's 100th birthday brought attention to our aging population and the fact that people in the West are living longer.
We "haven't been as successful in finding ways to prolong healthy life," according to Harley Street wellness expert Aamer Khan, even though medical advancements over the past 50 years have allowed us to live longer.
Nowadays, it's typical for people to deal with multiple chronic conditions concurrently for at least 15 years of their lives, or about a fifth of their total lifespan.
Thankfully, we're starting to understand and treat at least some of the most severe of these conditions. According to Daniel Lyons, portfolio manager for Janus Henderson's healthcare and biotech team, innovative medications and treatments are "addressing unmet medical needs in ways not previously possible."
The ageing of our population is at a turning point.
The difference between lifespan and what Khan refers to as "healthspan"the number of years of healthy life free from chronic illnessesis an issue that affects more people than just those who are directly impacted. Additionally, it costs society money. "If you look at a chart of average health spending by age, it basically goes crazy from around 75 onwards, rising almost vertically," says Polar Capital's head of healthcare Gareth Powell. As the baby boomers enter their retirement years, the number of people in their 75s and 80s is expected to skyrocket, which could be extremely costly for society.
Senior executive and board member Douglas Williams of a number of biotechnology companies contends that we are at a "inflection point" and that age-related illnesses like Alzheimer's "could end up bankrupting the global healthcare system" if effective treatments aren't found soon.
The fact that the conditions typically have multiple triggers rather than a single cause complicates the search for effective treatments. Additionally, various circumstances may have an impact on one another. Kiren Baines-Mortimore, CEO and founder of Valaya Bio, a biotechnology company addressing age-related degenerative neurological diseases, states that "there's never going to be one treatment for everyone" even for a single family of diseases. Rather, it is likely that we will need to create treatment combinations that take advantage of various biological mechanisms. According to Tony Banerjee, the founder and CEO of HarleyDoc, any treatment for diseases like dementia "need to be done in a very measured and multi-disciplinary way".
There is a bright side for investors, but governments and healthcare systems will face financial difficulties as a result. According to George Viney, co-manager of the Trojan Global Equity fund, drug and biotechnology companies have a "enormous opportunity" due to the aging population and the difficulty of maintaining their health. "Treatments that can prolong people's lives in a healthy and independent manner and lessen the need to spend enormous sums of money on hospital care will be extremely valuable.".
The difficulties in treating heart disease.
According to Powell, "the rising prevalence of cardiovascular disease in that age group may be the primary reason why healthcare costs balloon from 75 or 80 onwards." This is a significant "unmet need," but the good news is that advancements have been made in the creation of better medical devices, such as those that treat atrial fibrillation or fix heart valves.
Drug development has advanced more slowly because, as Powell notes, "it's so incredibly expensive to develop drugs for heart disease, as you have to do massive trials." Regulators consider heart disease to be a chronic condition rather than a life-threatening condition like cancer, so they are far less tolerant of any side effects. It's also possible that healthcare systems won't pay for the medications. Patents on popular medications expire, which lowers patient costs but discourages pharmaceutical companies from investing, which has hampered research in this field.
Powell, however, is hopeful that after "dropping off the radar a bit," interest in heart disease treatment has started to resurface and advancements are being made. He draws attention to the recent controversy surrounding Lp(a), a form of cholesterol that has been connected to inflammation, clotting, and the accumulation of plaque in arteries. There is "strong evidence that people with Lp(a) have a higher risk of heart attacks," and medications that reduce blood levels of Lp(a) have shown promise for a number of businesses.
Enormous potential for weight-loss medications.
Obesity is another significant factor contributing to issues with an aging population. Obesity feeds into a number of other conditions, perhaps most notably diabetes. According to Khan, the NHS spends £1 billion annually on treating diabetic foot ulcers alone, making diabetes one of the major causes of healthcare expenditures for the elderly. Additionally, diabetes is linked to a significantly increased risk of Alzheimer's disease, "to the extent that some people call Alzheimer's type-3 diabetes," according to University of Oxford precision medicine professor John Todd. Additionally, obesity is thought to be a risk factor for other diseases like cancer and heart disease that disproportionately affect the elderly.
The development of long-lasting, efficient treatments for diabetes and obesity was sluggish until recently. But over the last five years, it has become evident that GLP-1 receptor agonists like Wegovy and Mounjaro are "the breakthrough that we have been waiting decades for," according to Todd. Although the long-term effects of these medications are still unknown, they appear to "outweigh any risks" at the moment.
According to Powell, there is proof that they offer "phenomenal broad-based health benefits that go far beyond just losing weight or tackling diabetes." According to studies, Wegovy can improve cardiovascular health "beyond that which you'd normally expect given the weight loss" by reducing inflammation throughout the body. GLP-1s can even lessen issues with the central nervous system, according to Evonne Sepsis of ESC Advisors.
Alzheimer's treatment progress.
The doctor is speaking with an elderly patient.
Dementia is the illness most frequently linked to an aging population, with Alzheimer's accounting for most cases. According to Neil Ward, vice-president of Pacific Biosciences, there is mounting evidence that the disease is mostly brought on by the toxic accumulation of specific proteins, like amyloids. These proteins can harm brain cells, including those involved in regeneration and repair, if they are not sufficiently eliminated.
One day, genetic treatments might considerably slow this process. However, Giovanna Lalli, director of strategy and operations at the self-funded UK medical research organization LifeArc, believes that in the short term, diagnostic blood tests employing the rogue proteins as biomarkers could revolutionize the disease's treatment. Trials for LifeArc's own test are scheduled to conclude in 2028. If everything goes according to plan, this will eliminate the need for the lumbar punctures and scans that are currently used to identify the illness, allowing for a quicker diagnosis and earlier intervention.
Early diagnosis will be beneficial, particularly if currently developed medications are developed. These have shown promise in aiding the body's removal of the proteins, and the Food and Drug Administration (FDA), a US regulator, has recently approved two of them.
Due to the drugs' difficult access to the brain, they have only had a small effect on the illness thus far and have adverse effects. But clinical trials for Roche's trontinemab are nearing their conclusion. An "almost complete wipe-out of the amyloid plaques in a couple of months without major side effects" has been demonstrated as a result of its superior blood-brain barrier crossing. Over the next ten years, sepsis predicts comparable advancements in other conditions like Parkinson's.
A restful night's sleep is important.
Lack of sleep has been linked to Alzheimer's disease and dementia in general. Research indicates a strong correlation between neurological disorders and sleep issues. According to Jane Rhodes, CEO of the biotechnology company AstronauTx, middle-aged people who don't get enough deep sleep are three times more likely to develop Alzheimer's.
The formation of memories and the "glymphatic flow" process, which "drives out all the metabolic waste that builds up during the day"including the toxins and neurotoxic proteins that can accumulate and fuel the development of diseases like Parkinson's and Alzheimer'smay be the reasons for this.
Elderly people only get a small portion of the deep sleep that younger people do, which may help to explain why dementia and other conditions are more prevalent in later life. Rhodes is optimistic that her company's medication will "make everyone sleep like a 20-year-old." Early in the upcoming year, clinical trials will begin.
According to Sepsis, inadequate sleep in middle-aged and older people "could be the next obesity." Treatments that enhance both the quantity and quality of sleep may have consequences that are similar to those of GLP-1 weight-loss medications. It is not surprising that Sepsis has discovered that "there are definitely quite a few companies that have started to look at this area" based on her work advising early-stage biotechnology companies, given the "vast opportunity" that this represents for the industry.
In fact, pharmaceutical behemoth Eli Lilly paid almost £8 billion to acquire Centessa Pharmaceuticals in order to gain a foothold in the sleep treatment market. There are a lot of opportunities here, and they are not just limited to medications, as current treatments are meant to help people fall asleep rather than promote the crucial deep sleep. A multifaceted strategy will be used to address the sleep issue, including advancements in diagnosis and the creation of wearable technology that tracks the amount of high-quality sleep we receive.
Strengthening the defenses.
Immune system deterioration is another cause of issues in an aging population. The quantity of viruses we have come into contact with increases as we age. Usually, this isn't an issue. In actuality, it's widely regarded as beneficial and a major factor in why adults experience fewer colds than children. However, some viruses can "reside in our brains in latent form for the rest of our lives," according to Todd. One such virus is the one that causes shingles. Other viruses, like the herpes simplex (cold sore) virus, can occasionally reactivate them, leading to "neuronal damage, which can then cause or accelerate many of the cases of dementia, including Alzheimer's."
According to Todd, there is growing evidence linking vaccination against specific diseases to a lower risk of dementia. He cites a 2024 study that discovered the Shingrix shingles vaccine extended life expectancy without dementia by about 17%. Giving people over 60 the Arexvy vaccine, which guards against the respiratory syncytial virus (RSV), reduced the number of dementia diagnoses they received over the next 18 months by a third, according to another 2025 study. Although there is still much to learn about the role of the immune system in conditions like dementia, these studies hold great promise for the future.
The theme's best investments.
Eli Lilly (NYSE: LLY), which owns the only two medications approved to treat Alzheimer's, donanemab and lecanemab, is one of the businesses leading the charge to slow the disease. Additionally, it contains Mounjaro (tirzepatide), one of the main GLP-1s that has been demonstrated to aid in weight loss, treat type-2 diabetes, and lower overall inflammation, including in the heart. Recently, it has created versions with lower dosages and an oral form. As mentioned in the main narrative, Eli Lilly has also recently entered the pharmaceutical market for sleep disorders. Its revenue has more than doubled since 2020 and is predicted to continue growing at a rate of about 15% annually, more than making up for the fact that it trades at 23 times its 2027 earnings.
Novo Nordisk (Copenhagen: NOVO) is the other company that rules the weight-loss industry. B), which creates the other main GLP-1 medication, Wegovy (semaglutide). Similar to Mounjaro, research has demonstrated that it can treat a variety of ailments, including cardiovascular ones, in addition to obesity. Recent studies have suggested that high-dose versions can help people lose over 25% of their body weight. Additionally, the company is developing a number of medications for diabetes and obesity. Even though earnings have tripled and sales have more than doubled from 2020, the shares are only trading at 14.2 times 2027 earnings and yielding 3.8%.
Gareth Powell of Polar Capital is especially interested in NewAmsterdam Pharma (Nasdaq: NAMS), a company that specializes in heart disease medications. The company is currently losing money, which makes it a risky wager, but if its flagship medication, obicetrapib, which is in late-stage clinical trials, is approved, it could make significant profits. According to preliminary findings, it can reduce "bad" cholesterol levels, and there are some early signs that it may even help some patients who are at high risk of Alzheimer's by reducing the accumulation of specific proteins associated with the illness.
Cytokinetics (Nasdaq: CYTK) is another small, high-risk, high-reward pharmaceutical company that focuses on heart disease. Its flagship medication, Aficamten, received approval in the US at the end of last year to treat a specific kind of cardiac condition. It also received approval in China and the EU. To determine whether the medication could be used for other heart patients, it is conducting more late-stage clinical trials. It is currently undergoing advanced trials for two additional cardiac medications, omecamtiv mecarbil and aficamten, and is working on some intriguing projects to treat neuromuscular disorders.
Janus Henderson's Daniel Lyons is especially fond of Boston Scientific (NYSE: BSX), a medical technology company. It has a proven track record of producing "less invasive, easier for doctors to use and gentler on older patients" medical devices. Cardiovascular devices, which enhance blood flow, correct irregular heart rhythms, and support the heart without requiring major surgeryparticularly beneficial for the elderlyaccount for about two-thirds of the company's revenue. Even though the company's overall sales have more than doubled since 2020 and are still growing rapidly, the stock is only worth 14 times its 2027 earnings.
PacBio (Nasdaq: PACB), a gene-sequencing company, is working to identify the genetic and epigenetic causes of aging. It recently received a contract to sequence genomes for the National Institute on Ageing's Long Life Family Study. In an effort to determine the reasons behind long life, it will follow families with a history of long-living ancestors over several generations. PacBio's management anticipates that the company will turn a profit in late 2027 or early 2028. The company has also secured other significant contracts.
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