Australian health care sector is one of the fastest growing, dynamic and highly diversified sectors having enormous potential to generate substantial returns for the Australian economy. A broad range of companies, from companies engaged in drug development to those offering medical insurance, form a part of the health care domain. Significant growth in the ageing population (an estimated 4 million people in the 65-84 years age bracket by 2022) makes a strong health care system indispensable. A rise in chronic diseases further reflects the need for an adaptable and specific health care models, including innovative research and development.
Australia’s robust health care system is operated by the federal, state and local governments in conjunction. It stands out amid the top sectors in the country despite uncertainty and oscillating stock market ecosystem. In 2019, the Australian government has made announcements regarding the funding grants to support medical research and disease eradication programs signifying the importance of the health care domain.
Is Medical Research in Australia All Set for an Explosive Growth?
In a media release dated 12 December 2019, the Australian government stated that inject a whopping amount in innovative medical projects. The Acting Minister for Health, Hon Alan Tudge MP, announced investing $14.7 million to underpin seventeen trailblazing medical projects helping turn pioneering medical ideas into reality, thereby, improving generations of future citizens.
It has been reported that the government would back these medical research projects through the Medical Research Future Fund (MRFF), comprising the following-
· The BioMedTech Horizons (BMTH) program: An initiative by the government aiming at moving the innovative technologies to the next stage, i.e. proof-of-concept and commercial development phase. This initiative is worth $45 million, of which $8.9 million is designated for nine medical research projects. An additional $10.6 million in matching contribution would be backed by private industry.
· The Biomedical Translation Bridge (BTB) program: This is a $22.3 million initiative to fund up to one million dollars to match the funding, fostering the transformation of novel therapies, innovative technologies as well as new medical devices. Through this initiative, $5.8 million would be injected into the medical research projects. A total of eight projects are planned to be backed by this BTB program during the 1st round of funding. An additional $14.6 million will be provided by the private industry in support of the BTB projects.
As a part of 2019-2020 federal budget rolled out in April, the government announced a new ten-year investment plan for the fund worth $5 billion. The announcement to back medical research came after the federal budget decided to raise the fund by $7.8 billion in new funding to meet the target of $20 billion by 2021.
Australian Government to pour in $7.5 million for research into AI in Health Care
In an announcement dated 16 December 2019, the federal government provided an update on investing $7.5 million for AI research within the health care space. The funds would be provided by the Australian government's Medical Research Future Fund.
Artificial intelligence (AI), primed for an explosive growth in the health care sphere, refers to the use of complex algorithms and software with an ability to imitate human intellect and evaluating complex medical data.
Furthermore, with the acquisitions of AI startup firms rising rapidly, the AI health market is believed to grow from$600 million in 2014 to $6.6 billion by 2021 at an explosive CAGR of 40%.
Applications of Artificial Intelligence in Health Care Sector
Also, it is worth noting that besides AI, inventions and developments in health care digital technology space have proven to be the major driving factors steering the economic growth of the country.
In a nutshell, with numerous potential applications and strong future growth prospects, and well-backed government’s funding grants, Australia’s burgeoning health care research is on the verge of seeing a boom in the near future.
Let us now have a quick look at some of the ASX-listed Health Care Stocks operating in digital health technology and AI ecosystem.
HeraMED (ASX: HMD): HeraMED is a MedTech entity that provides the ease of smartphone-based fetal heartbeat monitoring to pregnant women through its cloud-based platforms and AI capabilities. HMD stock was trading at $0.160, down 5.882% on 18 December 2019 (at AEDT 1:28 PM). HeraMED’s market capitalisation was at $14.88 million and the company had 87.53 million outstanding shares. The YTD return on HMD’s stock was 2.86%.
Cochlear Limited (ASX: COH): Leading health care equipment and services company offering a range of implantable hearing solutions. COH stock was trading at $235.21, up 1.651% on 18 December 2019 (at AEDT 1: 29 PM). COH’s market capitalisation stood at $13.38 billion and the company had 57.83 million outstanding shares. The YTD return on COH’s stock was 32.30%.
Recap Health Limited (ASX: RAP): ResApp’s innovative smartphone-based technology utilizes an AI approach for the diagnosis and evaluation of chronic and acute respiratory diseases such as pneumonia, chronic obstructive pulmonary disease (COPD), asthma, and bronchiolitis. RAP stock was trading flat at $0.265 on 18 December 2019 (at AEDT 1:30 PM). RAP’s market capitalisation stood at $209.35 million and the company had 790.01 million outstanding shares. The YTD return on RAP’s stock was 140.91%.
CardieX Limited (ASX: CDX): A leading health-tech company CardieX Ltd is engaged in designing, manufacturing and commercialization of medical and consumer tools for managing heart diseases like advanced hypertension. CDX stock was trading flat at $0.028, on 18 December 2019 (at AEDT 1:31 PM). CDX’s market capitalisation stood at $20.07 million and the company had 716.85 million outstanding shares. The YTD return on CDX’s stock was -6.67%.
Volpara Health Technologies Limited (ASX: VHT): Volpara offers analytics services in breast imaging and provides analysis products to diagnose breast cancer at an early stage. VHT stock was trading at $1.79, down 0.556% on 18 December 2019 (at AEDT 1: 32 PM). VHT’s market capitalisation stood at $392.51 million and the company had 218.06 million outstanding shares. The YTD return on VHT’s stock was 64.76%.
Nanosonics Limited (ASX: NAN): Nanosonics Limited manufactures and commercializes infection control solutions and decontamination products. The company’s automated device Trophon® aids in lowering the cross contamination between patients. NAN stock was trading at $6.565, down 2.015% on 18 December 2019 (at AEDT 1:33 PM). NAN’s market capitalisation stood at $2.01 billion and the company had 300.48 million outstanding shares. NAN’s stock provided a substantial year to date return of 141.01 percent.
Genetic Technologies Limited (ASX: GTG): Genetic Technologies is a leading biotechnology company engaged in the manufacturing and marketing of genetic risk assessment technology. The technology assists in detecting chronic diseases at an early stage. GTG shares were trading at $0.004, down by 20% on 18 December 2019. GTG’s market capitalisation stood at $20.32 million and the company had 4.06 billion outstanding shares. GTG’s stock gave a return of 7.15 percent in the past 3 months period.
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