The virus will spark a wave of innovation, and big pharma will ...

World

The virus will spark a wave of innovation, and big pharma will cash in

ANALYSIS | The intense race to come up with a vaccine will create new shortcuts and ways of working

Matthew Lynn

There are three things we know always happen in a crisis. Poor leaders get found out, as voters in the US may have already started to realise. The initial response is always completely hopeless, as Britain has discovered once again. And finally, and most importantly, whether it is a war, a natural disaster, or an epidemic, eventually it sparks a wave of innovation – because in the end human ingenuity always rises to a challenge.

The Covid-19 crisis is, at the risk of stating the obvious, the worst medical crisis we have witnessed in a century. But here is a bet, and one that matters to investors: it will also lead to a much-needed wave of medical innovation.

The past decade has been terrible for the pharmaceuticals and life sciences industry, with slowing innovation, defensive mergers and dismal returns for shareholders. However, that could be about to change because new ways of working will be discovered, regulations will be reinvented for a new era, and spending on healthcare will be increased. The companies that come up with treatments will be the big winners, but the whole industry will start to flourish once again...

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