Post #75: Mr Venn explains healthcare - Heptagon Capital – Production

A picture, it is often said, tells a thousand words. If so, then consider the below. Your author spent two hours of his Friday afternoon listening to Novo…

Post #75: Mr Venn explains healthcare

A picture, it is often said, tells a thousand words. If so, then consider the below. Your author spent two hours of his Friday afternoon listening to Novo Nordisk’s presentation on research and development given at the American Diabetes Association’s Annual Conference (held virtually this year). Your author is no scientist and struggles to get excited about double-blind randomised trials, placebos and control groups. This picture, in his view, shows you all you need to know.

We should be thankful to the Nineteenth Century Cambridge mathematician John Venn for his work on set theory. What it allows is to take the complex and make it simple. The Venn diagram above highlights that there is a significant overlap between patients suffering from type-two (T2) diabetes, cardiovascular disease (CVD) and obesity. It therefore behoves drugs businesses to work on solutions which potentially address all three problems simultaneously.

The figures make for quite daunting reading: ~510m people live with cardiovascular disease, a number which is expected to increase to ~530m by 2030 (per GBI Research). Of these, ~18m die annually, an estimated 31% of all deaths globally (according to the World Health Organisation). Notably, 70% of diabetes patients die from atherosclerotic cardiovascular disease (where the arteries typically narrow and become clogged). Meanwhile, 40% of patients who are hospitalised for heart failure heave diabetes (data courtesy of Novo Nordisk). It gets worse. What the chart does not show is that a further 37m people globally suffer from non-alcoholic fatty liver disease (or NASH) – another co-morbidity, as such illnesses are known – which often results from obesity and/or diabetes. Just 0.1m are treated today (per Novo).

All this implies that there is a significant unmet need for new drug innovation.Novo described the current situation as one generally characterised by “clinical inertia.” Logically, businesses (including Novo) – need to raise the bar in terms of innovation. The good news – at least as far as your layperson author understood it – is that this is now occurring. Notwithstanding the disruption COVID-19 has wrought to all sectors, clinical trials for new products which simultaneously seek to address some of the above needs continue apace. New drugs should also hit the market in the coming years. And, importantly, the businesses which operate in this critical sector remain committed to investing in further research.


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