As we enter the month of October, investors are faced with an obvious question: is the time right for new investments in the oncology sector?
Why does the healthcare sector move in cycles?
Subject to scientific advances and regulatory decisions, the healthcare sector is subject to cycles of capital inflows and outflows. These fluctuations regularly lead to strong pressure on company valuations.
During periods of capital outflows, investors express skepticism about the chances of clinical or commercial success. We call this the ‘show-me’ stage. Conversely, when the probability of success increases and business prospects brighten, investments flow back into the sector. The growth stage marks the transition from laboratory innovation to the creation of tangible clinical assets that generate economic and financial value.
