Healthcare shares on the Australian Securities Exchange (ASX) offer investors opportunities to support and benefit from advancements in medical technology and treatments. Companies like OncoSil Medical, SomnoMed Limited, and Arovella Therapeutics Limited have been making significant strides, making them attractive investments. This article will explore what ASX healthcare shares are, why investing in them can be beneficial, and highlight some top picks in this sector.
What Are ASX Healthcare Shares?
ASX healthcare shares are stocks of companies listed on the Australian Securities Exchange that operate in the healthcare sector. This sector includes a wide range of businesses, from medical device manufacturers and biotechnology firms to pharmaceutical companies and healthcare service providers.
These companies are involved in developing and commercialising products and services aimed at improving health outcomes.
Why Invest in ASX Healthcare Shares?
Innovation and developments in medical science are frequently the driving forces in the healthcare industry. Companies that develop new treatments or medical technologies can experience rapid growth, offering substantial returns for investors.
Healthcare is a critical and often non-discretionary sector. Regardless of economic conditions, there is always a demand for medical services and products, making healthcare stocks relatively resilient during market downturns. Like during the COVID-19 pandemic, it highlighted the importance of healthcare innovation. Companies that adapted and contributed to pandemic response efforts have gained significant attention and investment.
As the global population ages, there is an increasing demand for healthcare services. This demographic trend supports the long-term growth potential of healthcare companies.
Top Healthcare Stocks on the ASX in 2024
Here are some of the top ASX healthcare shares to consider for your investment portfolio:
1. OncoSil Medical Limited (ASX: OSL)
OncoSil Medical is a global medical device company focused on interventional oncology. The company has developed the OncoSil™ brachytherapy device, which is designed for the treatment of locally advanced unresectable pancreatic cancer. This device delivers a targeted intratumoral placement of Phosphorous-32 (32P), allowing for a greater radiation dose directly into the tumour while sparing surrounding damage to critical organs.
Recent milestones for OncoSil include the appointment of Peter Hall as a Non-Executive Director, expected by the end of August 2024. This move brings valuable expertise to the company. Additionally, OncoSil has seen substantial investor interest, with a $2.7 million placement from an Australian institutional investor, Pengana Capital Limited. These developments have driven the stock price up by over 170% since early June, highlighting its potential as a good long-term investment.
2. SomnoMed Limited (ASX: SOM)
As of the latest data, SomnoMed’s stock price stands at AUD 0.341. The stock has recently shown a positive trend, gaining 3.03% in the current trading session. In 2024, SOM.AX delivered an impressive 32.00% return, significantly outperforming the S&P/ASX 200 index, which has a year-to-date return of 4.80%.
SomnoMed specialises in providing diagnostic and treatment solutions for sleep-related breathing disorders, including obstructive sleep apnea, snoring, and bruxism. The company has thrived on the global recovery of the medical sector and the broader dental community following the COVID-19 pandemic. With a growing number of people seeking treatment for sleep disorders, SomnoMed's innovative products are well-positioned to capture an expanding market, making it a strong investment candidate.
3. Arovella Therapeutics Limited (ASX: ALA)
As of the latest data, Arovella Therapeutics’ stock price stands at AUD 0.1651. The stock has remained relatively stable recently. However, over the past year, ALA.AX has surged by an impressive 230.00%, significantly outperforming the S&P/ASX 200 index’s return of 7.02%.
Arovella Therapeutics, formerly Suda Pharmaceuticals, is a biotechnology company focused on developing its invariant natural killer T (iNKT) cell therapy platform. Developed in collaboration with Imperial College London, this platform aims to treat blood cancers and solid tumours. Arovella's lead product, ALA-101, consists of CAR19-iNKT cells modified to target the CD19 antigen found in various cancer types. The innovative nature of their approach and the potential for breakthrough treatments in oncology make Arovella a compelling investment opportunity.
Are ASX Healthcare Shares a Good Investment Right Now?
Investing in ASX healthcare shares can be a wise decision for several reasons. Healthcare companies are continually researching and developing new treatments and technologies, providing potential for high returns on investment. With ongoing global health challenges, the demand for advanced medical solutions remains strong. Companies addressing these needs are likely to thrive. Trends such as an ageing population, the increasing prevalence of chronic diseases, and the aftermath of the COVID-19 pandemic continue to drive the growth of the healthcare sector. Recent capital raises and institutional investments indicate strong confidence in the future prospects of ASX healthcare companies.
ASX healthcare shares offer a blend of growth potential, resilience, and innovation, making them attractive for investors. Companies like OncoSil Medical, SomnoMed, and Arovella Therapeutics are leading the way with their cutting-edge technologies and treatments. As the healthcare sector continues to evolve, these stocks present compelling opportunities for those looking to invest in a critical and ever-growing industry.
