What’s in store for Healthcare Stocks in 2021: Top 5 picks 

Healthcare companies are active all year round irrespective of the global situation; hence it is always considered good to have a decent exposure in the healthcare stocks if one is making a portfolio. It is also considered as a popular trend, particularly during political or economic instability.

The year 2020 has been drastic for the whole world due to the Covid-19 pandemic. The one very important aspect that came into forefront was how frequent innovations are crucial for the healthcare sector. Although some of the sectors were badly ravaged by the crisis, the year 2020 has clearly established the prominence of the healthcare industry.

While the companies that have already delivered or are in the process to roll out vaccines have been in the limelight, there are many other names other than these companies which can be expected to do well in 2021.

The performance of healthcare stocks can be measured by looking at the total return, which is considered as one of the best indicators. An investor can also look for companies that will benefit from the manufacturing of protective personal equipment and surgical equipment, keeping in mind the pandemic and care facilities around it.

In this article, we will look into 5 healthcare stocks with sound fundamentals, and which have delivered humongous returns. They are not a recommendation but have been selected based on their performance and growth outlook. Before investing, one should thoroughly check the business aspect and analyse the company.

(Image source: ©Kalkine Group 2020) 

Synairgen PLC (LON:SNG)- It is a company engaged in the development of the respiratory drug, established in 2003.

Synairgen made significant clinical progress with SNG001 during H1 2020 ending 30 June. The phase II trial of its inhaled formulation of interferon beta, SNG001, indicated that it is a valuable option for the treatment of Covid-19 patients. The net assets of the company were recorded at £11.58 million as compared to £4.30 million on 30 June 2019. Synairgen was successful in raising £14.0 million (before expenses) in an equity issue to be utilised for Covid-19 related activities.

With complete focus on accelerating the discussions with regulatory authorities for approval regarding SNG001, the company aims at delivering effective treatment for Covid-19 and is working in favour of patients and its shareholders.

Redx Pharma PLC (LON:REDX)

Redx is a pharmaceutical company that is involved in the discovery and development of the drug, mainly focusing on cancer and fibrosis

The company had entered into a new research collaboration with Jazz Pharmaceuticals in September, for the development of two targeted cancer therapies, which will benefit the company with regards to royalties.

The company believes that the combined strength of science, proprietary position of its assets and its commercial potential, differentiated programmes in its pipeline and strong investment partners will help in positioning it to deliver meaningful results which will contribute towards the benefits of patients and value for shareholders.

Avacta Group PLC (LON:AVCT)

Avacta Group PLC is a UK-based healthcare company that is involved in the development of innovative cancer therapies and diagnostics based on its proprietary Affimer® and pre|CISIONTM platforms.

Avacta collaborated with Cytiva for the development of a rapid test for the mass population screening of coronavirus antigen. It also collaborated with Adeptrix to develop a high throughput Affimer-based Covid-19 antigen bead-assisted mass spectrometry test. The company witnessed an increase in cash balance to £54.5 million in H1 2020 ending 30 June as compared to £5.6 million on 30 June 2019.

With the expected launch of a rapid, saliva-based coronavirus antigen lateral flow test and the planned phase I study for AVA6000 pro-doxorubicin, Avacta is focused on achieving several milestones ahead of it. The SARS-CoV-2 spike protein binding Affimers has created other opportunities for Avacta that are in the pipeline.

Sareum Holdings PLC (LON:SAR)

The company is engaged in delivering targeted small molecule therapeutics in order to improve the treatment of cancer and autoimmune diseases. It specialises in the development of the drug.

At the beginning of the year, Sareum received R&D Tax Credit of £0.23 million. The company disclosed in its full-year result for the period ending 30 June that it raised £1.02 million (gross) in June through a placing by Hybridan LLP.

The company has plans to continue employing rigorous capital management in the development of its internal assets, and the company expects to report on continued progress with its internal, proprietary programmes and its licensed programmes in 2021.

E-Therapeutics PLC (LON:ETX)

It is involved in the discovery of drug by using a powerful computer-based approach. The company is based in Oxford, United Kingdom.

The company successfully entered into an agreement to collaborate with Galapagos NV. This will help the company in the identification of new therapeutic approaches to modulate a specific mechanism involved in idiopathic pulmonary fibrosis. In the first half of the year, ending 30 July 2020, it raised £11.6 million gross proceeds to be used in expanding its platform abilities.

The company will continue its talks with large pharmaceutical and biotechnology companies and is looking forward to a robust future.