Dynamic New Framework Correlates Robust Impact and Strong Returns in the Healthcare Sector

NEW YORK, June 20, 2019 /PRNewswire/ -- Preliminary research released today from EntryPoint Capital and Boundless Impact Investing introduces a new quantitative framework for the healthcare sector that helps investors rigorously measure impact outcomes and achieve strong investment returns. Investing in healthcare is a big business, but investors lack consistent and credible analytical standards when evaluating a single company or comparing one company to another. The paper, "Measuring Health Impact – Quantifying the True Value of Health Enterprises ", introduces an innovative framework, which can accurately measure and score a healthcare company's impact against a set of quantifiable objectives. The framework has the potential to transform healthcare investing into a more quantitative and systematic approach to portfolio construction and optimization.

When it comes to measurable data-driven impact and the public health outcomes that result, the healthcare industry is unique among other "impact" sectors. Just the sheer scale of the healthcare industry is a key advantage: healthcare is a $10 trillion global industry. In addition to a robust capital market for healthcare securities, thousands of public companies trade daily on major stock exchanges all over the world. This offers investors a deep pool of potential companies from which to choose, along with the opportunity to significantly scale an impact strategy. As important, healthcare is a rigorously measured industry. Whether it is a drug, device, or emerging digital health solution, companies must demonstrate safety, efficacy and a clear economic benefit. A data-driven method for screening companies is fundamental to their regulatory approval and successful commercial launch, leading to a strong foundation on which to systematically quantify impact and outcomes. 

Improved healthcare outcomes and attractive returns are not mutually exclusive. The impact-measurement framework more accurately assesses critical public health objectives that correlate to high impact. The authors began with the thesis that healthcare companies that achieve the greatest impact also have the greatest potential to generate impressive returns – a hypothetical virtuous circle for impact investors. Initial research shows that this framework can result in smarter decisions about which companies to invest in and which ones to underweight or avoid altogether in a customized portfolio or a global index. The authors plan to follow up with additional research that shows how a systematic and quantitative version of the framework leads to better, more targeted impact investment strategies and outcomes.

"Whether it is saving lives, curing disease, or expanding access to care, the healthcare industry offers a unique, data-driven value proposition for impact investors," said Daniel Lubin, Founder and CEO of EntryPoint Capital. "Healthcare is one of the most measured industries, and without validated data, new products and solutions struggle or fail to reach the market and scale. Our research paper lays the groundwork for an analytical framework that can truly transform investing in healthcare. Our plan is to follow up with additional research that will show how to apply it into a systematic and quantitative model for better, more targeted impact investment strategies."

Connecting Health Impact with Returns
To demonstrate how the new framework works, the authors analyzed three case studies of archetypal healthcare impact companies: Tabula Rasa (medication optimization and risk mitigation), Teledoc (comprehensive virtual care provider), and Guardant Health (precision oncology for advanced cancer care).  Each company has delivered excellent patient health outcomes with superior investment returns over time relative to conventional healthcare industry benchmarks (e.g. MSCI World Healthcare Index or MSCI ACWI Healthcare Index).  

The Data-Driven Revolution is Here
"Quantifiable impact measurement has the potential to drive better impact investing in healthcare," said Michele Demers, CEO of Boundless Impact Investing. "We believe quantifiable impact measurement can and should be fully integrated into mainstream investment management. Our framework is an important first step in advancing how to make that important correlation between a healthcare company's financial and social returns."

Investors will keep refining data-driven health impact metrics, but this paper provides an important starting point. Further research into quantifying the "human value" of healthcare companies will help investors shape the future of this industry – one that puts patients first on a road to better care while rewarding investors who want to play an active role in making the world a better place.

About EntryPoint Capital
Entry Point Capital ("EntryPoint") is an investment management firm established to capture the opportunity arising from the profound transformation of the global healthcare industry over the next several decades. The companies at the forefront of this transformation are poised to benefit from superior organic growth prospects in large, growing domestic and international markets, and provide investors with the potential for superior returns relative to traditional healthcare industry benchmarks. EntryPoint targets the critical innovation themes with the greatest potential to impact the industry and propel this transformation. EntryPoint's strategies will apply scientific, systematic, and quantitative techniques to investing in the global healthcare industry, providing institutional and family office investors with a range of uniquely designed, differentiated, high-capacity public equity portfolios tailored to investors' appetite for risk, volatility, and return. To learn more about EntryPoint, please visit https://entrypointcap.com.

About Boundless Impact Investing
Driven by the latest research by independent industry and academic experts, Boundless Impact Investing offers analysis, market trends, and evidence of best practices in a growing number of emerging sectors that address major social and environmental challenges. We are an advanced consulting firm that enables investors to connect with industry leaders and peers for expert analysis, diverse perspectives, and real-time collaboration. Our investor education and expert advisory services offer proprietary access to both subject-matter experts and other impact investors. Boundless does not collect transactional fees, and is therefore able to maintain objectivity. To learn more about Boundless Impact Investing, please visit https://boundlessimpact.net.

Contacts:

ENTRYPOINT CAPITAL
Andrew Merrill
Prosek Partners
212.279.3115
[email protected]

BOUNDLESS IMPACT INVESTING
Jaishree Singh
973.738.9818
[email protected]

SOURCE Entrypoint

Related Links

https://entrypointcap.com