Biopharma: a key sector in the fight against cancer
The growing focus on health is one of the megatrends on KBC's radar. People get sick whatever the economic conditions, creating a constant demand for care. Oncology is the most important - and one of the fastest-growing - categories in our healthcare system. Over recent decades, we have seen several breakthroughs in cancer prevention, detection and treatment. That has happened in large part thanks to the innovative biopharmaceutical sector.
The need for new and better treatments is constant, so there are always opportunities for investors.
Youri Amerijckx, Portfolio Manager at KBC Asset Management
Why oncology is and remains important
‘In Belgium alone, thousands of people battle cancer every year. And despite major advances in recent years, cancer remains the second biggest cause of death worldwide, after cardiovascular disease. Oncology therefore dominates the pharmaceutical market and pipeline,’ states Youri Amerijckx, Portfolio Manager at KBC Asset Management
The already immense oncology market is expected to continue to grow robustly, driven by factors such as demographic ageing and the associated rising incidence of disease.
Youri Amerijckx, Portfolio Manager at KBC Asset Management
‘Despite huge investments in Research & Development (R&D), many treatments often still lack curative power. The disease burden, both human and economic, remains high,’ says Amerijckx. Hence the need for new and better treatments, and hence the opportunity for investors.
Groundbreaking innovations in biotech
'For patients, the biggest advantage of biologics is that they are more specific and therefore have the potential to work more effectively, with fewer side-effects, compared to chemical drugs. An advantage for the manufacturer - and consequently for the investor - is that although the production process is more complex, expensive and longer, the structural variation in biologics also makes them better protected against generic competition.
The biotech industry is known for its constant innovation and revolutionary discoveries. Companies in this sector are at the forefront of developing new drugs, therapies and technologies.
Youri Amerijckx, Portfolio Manager at KBC Asset Management
- Immunotherapy
‘Many cancers are able to evade the body’s immune system, as it were, allowing cancer cells to grow undisturbed,’ says Amerijckx. ‘Most patients receiving immunotherapy are given ‘checkpoint inhibitors’. These drugs remove the ‘brake’ that is applied by the cancer cells, effectively ‘resetting’ the body’s immune system, which is reactivated to recognise and destroy the cancer cells.’
‘A well-known example of a checkpoint inhibitor is the drug Keytruda from the US biopharmaceutical company Merck & Co,’ Amerijckx adds. It is used to treat various types of cancer. It can be used alone or in combination with other drugs to treat advanced cancers, cancers that have spread within the body or cancers that are no longer responding to conventional treatment.
There are several types of immunotherapy. Many of them are still in development and are therefore only available to patients in research settings. ‘With cancer vaccines, for example, the patient's own immune cells are manipulated in a laboratory to enable them to better recognise and destroy cancer cells.’ ‘Immunotherapy unfortunately does not yet work for everyone, but the research continues. Specialists are learning more and more, and the number of patients who benefit from immunotherapy is growing,’ says Amerijckx.
- Smart chemotherapy using Antibody Drug Conjugates (ADCs)
Antibodies are an important part of the body’s immune system. Smart chemotherapy combines antibodies with traditional chemotherapy drugs to target cancer cells much more accurately, limiting the damage to healthy tissues.
‘Think of it as a kind of biological missile,’ says Amerijckx. ‘Antibody drug conjugates, or ADCs, combine the best of both worlds: the precision of targeted therapy and the power of traditional chemotherapy. The antibodies work as a kind of tracker that detects the cancer cells very specifically, after which the chemotherapy destroys the cancer with an ‘explosive charge’.’
The ADC technology and market are evolving rapidly, as borne out by the exponential growth in ADC drug development. The first ADC drug was approved in 2000. However, it took almost 20 years to perfect its action. Today, we are on the cusp of a rich period of clinical data. Smart chemotherapy has the potential to eventually replace conventional chemotherapy.
Home-grown expertise
‘Belgium has a very strong position in biopharma, with a global reputation and recognition. The leading biopharmaceutical companies are active in Belgium.’
Over the past decade, around 10 000 new jobs have been created in the sector, exports have tripled and investment in research and development has more than doubled to almost 6 billion euros.
Belgium is one of the European leaders in clinical trials, one third of which are focused on cancer treatments. Partly because of this, new drugs can be approved for health insurance reimbursement every year in Belgium.
Youri Amerijckx, Portfolio Manager at KBC Asset Management
‘Belgium's unique position is due to the excellent performance in all activities of the biotech value chain: from research and development, through (pre-)clinical trials, to advanced bioproduction and export,’ Amerijckx emphasises. ‘Belgium has a strong support ecosystem that connects the big names in pharma as well as smaller players, academia and government. Add a large pool of talent, nurtured by 12 universities and seven university hospitals, plus impressive expertise, and you can see what makes our country so attractive for investment.’
The Flemish Institute of Biotechnology (VIB) plays a key role in the Flemish biotech ecosystem and has made significant contributions to the development of innovative therapies through its fundamental research. ‘Thanks to the strategic collaboration between VIB and universities, numerous spin-offs have been developed that are internationally recognised today,’ Amerijckx notes. ‘A good example is Argenx.’
VIB could be seen as the facilitator in the Flemish biotech landscape. VIB translates theory into practical applications, benefiting both investors and patients.
Opportunities for investors
‘People are living longer, leading to increased demand for health products and services. Technological advances and a host of new biological discoveries are providing sustained support for that growth,’ says Amerijckx.
The growing focus on health is one of the megatrends on KBC's radar. We use health care regardless of the stock market climate. People get sick whatever the economic conditions, creating a constant demand for care.
Youri Amerijckx, Portfolio Manager at KBC Asset Management
The oncology market - more specifically - is dominated by biopharmaceutical companies, such as AstraZeneca, Merck & Co and Genmab. ‘Many of the leading players in oncology have achieved remarkable results in recent years. Successful drug approvals or positive clinical trial results can lead to rising share prices,’ says Amerijckx. ‘The oncology market is also very competitive and dynamic, with the expiry of patents and the entry of biosimilars (ed.: a biological drug that is similar to the original whose patent has expired).’
‘It is important to emphasise that investing in biotech also carries risks,’ Amerijckx underlines. ‘Increased volatility, in particular, can cause problems for investors. When regulatory approvals fail to materialise or the results of clinical trials do not turn out as expected, share prices can fall sharply. It is important to do thorough research and understand the potential risks before making an investment decision.’
KBC supports Kom Op Tegen Kanker (KOTK)
In 2024, a record amount of more than 49 million euros was raised by the anti-cancer foundation KOTK, roughly a third of which was allocated to biomedical research.
‘Care for the patient and their environment is a role that can’t be fulfilled by the biotech industry, but is somewhere where KOTK can absolutely play a key role, in addition to prevention,’ concludes Amerijckx optimistically. ‘Cancer is a traumatic diagnosis which has a deep impact. However well supported the patient is by friends, family and healthcare professionals, the patient ultimately has to follow the pathway on their own. It’s a journey that, despite all the many support along the way, can be very lonely. KOTK is also strongly focused on this, with its support for drop-in centres for current and former patients, patient support groups, palliative networks and other psychosocial projects.’
By lending its support, KBC is seeking to offer some comfort to everyone who is touched by this disease.
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The information contained in this publication is for information purposes only and should not be considered as investment advice.
