TISCO Bank recommends investing in healthcare stocks, expecting strong growth in biotech and MedTech sectors.

TISCO Bank expects biotech stock prices to continue rising after surging 64% in a year, benefiting from AI accelerating new drug discovery, coupled with a golden age of M&A and the FDA's accelerated drug approval process, driving the biotech and MedTech sectors.  

On May 8, 2569, Mr. Nattakrit Laotaweesap, Head of Wealth Advisory at TISCO Bank Public Company Limited, revealed that the bank has been recommending that clients invest in the healthcare sector since the beginning of 2569. This is because it is viewed as a safe and growing sector, even in an economic downturn, and its share prices have the potential for rapid growth due to the increasing use of artificial intelligence (AI) in the drug discovery process, leading to higher success rates than in the past. All of this has been in line with expectations, as healthcare stocks have generated outstanding returns since the beginning of the year, especially during the US-Iran conflict. Healthcare stocks, particularly those in the biotechnology sector, have risen sharply, outperforming safe haven assets like gold, proving that medical innovation is being elevated to a strong profit-generating asset during times of crisis.

"Based on data from the date of the US attack on Iran (February 28 - April 27), investments in biotech stocks yielded an 8% return, while gold returned a negative 13% and global stocks returned only 2.4%. Furthermore, comparing returns over the past year, investments in biotech stocks generated a return of 64%, outperforming both gold (38.41%) and global stocks (29.95%)."

The recent sharp rise in biotech stocks is driven by three main factors: 

1. High immunity; strong fundamental factors. 

While other businesses are disrupted by rising transportation costs or oil prices, the biotech industry has strong fundamentals because the demand for medicines is a basic necessity regardless of global events. Patients will always need medication. This is a business sector that is less susceptible to global crises but is one of the most financially stable.

2. The Golden Age of Mergers and Acquisitions (M&A) 

When major pharmaceutical companies facing the patent cliff rush to pour massive amounts of money into acquiring mid-sized and small-scale biotech companies with cutting-edge innovations in order to gain patents for new drugs, these deals are often made at prices higher than the market price (premium), driving their stock prices up rapidly overnight.

3. The FDA is expediting drug approval. 

The once cumbersome regulatory process for drug approval by the U.S. Food and Drug Administration (FDA) is changing with the Accelerated Approval and Priority Review Vouchers (PRV) programs, allowing new drugs to be approved and enter the market faster than ever before. This reduces time-related risk and enables companies to realize revenue sooner, while also being a key factor in encouraging large pharmaceutical companies to accelerate acquisitions.

Furthermore, MedTech is equally popular.
As medical devices become the "tech king" of the healthcare world, 

Beyond the biotech sector, another prominent and noteworthy group is Healthcare Equipment & Supplies (MedTech), or stocks related to specialized medical instruments and equipment, such as robotic vascular surgery or high-precision AI cancer screening. These are becoming key targets in M&A trends for large companies seeking shortcuts to expanding their innovation portfolios and revenue streams.

This year, MedTech businesses have upgraded their business models from simply "device manufacturers" to fully embrace "Software-as-a-Medical-Device" (SaMD), shifting from outright sales to annual subscription fees for AI updates and advanced data analytics software. This recurring revenue model not only increases and stabilizes profit margins but also creates a structural advantage that attracts mergers and acquisitions from large biopharma companies, bridging growth gaps and creating a new S-curve in the long term.

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