Healthcare 2026: From Underdog to Front Runner

What Is It All About?

Tech has revolutionised our lives, yet in healthcare most people’s main “device” is still a smartwatch—far from what we need to stay healthier for longer. Our two strategies aim to address this: Bionics focuses primarily on preventive diagnostics and continuous monitoring to keep the body on track, while Biotech 360° targets disease at its biological roots. Together, they push toward a future where our “human engine” is stronger, more resilient, and better maintained.

Bionics:

• Sensing – diagnostics & monitoring to catch issues early.
• Treatment – MedTech & implants to restore or boost function.
• Healthcare systems – services that improve access and lower costs.

Biotech 360°:

• Therapeutic developers – breakthrough drugs for high unmet needs.
• Biopharma supply chain – tools and services that speed drugs to patients.

A Look In The Rearview Mirror 

Healthcare has lagged badly for years while investors chased AI mega-cap tech. In 2025, the cumulative gap became extreme: healthcare underperformed the S&P 500 by the widest margin in roughly 20–30 years and now trades near one of its deepest valuation discounts in decades, with the sector's forward P/E still about 20% below that of the S&P 500. 

Where regulation has been broadly supportive for Tech and Energy over the last five years, Healthcare seemed to collect negative headlines from all fronts: 

• U.S. drug pricing reform (Inflation Reduction Act, Most Favored Nation risk).

• Escalating scrutiny on insurance and middlemen. 

• Tariffs and geopolitical frictions are raising input costs and supply-chain risk. 

• Nomination of prominent healthcare critics for critical roles. 

• And finally, the One Big Beautiful Bill Act (OBBBA), which enacts roughly $1Tn in healthcare reimbursement cuts by 2030. 

Our 2025 call was simple: uncertainties would create opportunities. That’s exactly what happened, but not uniformly across healthcare. Healthcare policy noise remained elevated, yet increasingly targeted rather than existential. Biotech, which had suffered the most on the way down, became the prime beneficiary once some of the macro and policy fog started to clear. 

In 2025, our Biotech strategy outperformed both the broader healthcare sector and our own Bionics strategy (performances YTD as of 1/12/2025): 

• Atonra Biotech 360° +31.2% vs +14.6% U.S. Healthcare vs +6% for Bionics. 

Even more telling: a sixth straight month of gains for biotech has only occurred twice before, at the end of March 2015 and April 2010, both at the start of major bull runs. History does not repeat perfectly, but it often rhymes. 

Have we passed “peak fear” in healthcare? 

Our 2026 call builds on this base: From underdog to frontrunner. 

The valuation gap between healthcare and the broader market does not even need to close fully for Biotech and Bionics to perform very well. Even a partial re-rating toward long-term averages, combined with double-digit earnings growth in our key sub-themes, is enough to generate attractive risk-adjusted returns. 

In other words, we do not need perfection. We need the market to accept that healthcare is not broken and that the winners of this cycle are different from those of the last one. 

Where We Stand

Atonra Biotech 360° – more clinical, closer to equal-weight to ride the bull 

Biotech today sits at the crossroads of structural need and capital scarcity. Big Pharma faces unprecedented patent cliffs and biosimilar competition on its largest blockbusters. To offset these losses, it must either buy or partner with innovative companies rather than build everything internally. 

In Biotech 360°, we are positioned where capital is most likely to flow: we are overweight in clinical-stage names with human proof-of-concept, not preclinical “science projects”. These are assets that can be plugged directly into Big Pharma’s franchises to compensate for revenue erosion from biosimilars and patent expiries. They already have meaningful de-risking via Phase 1b/2 or Phase 2 data while still trading at valuations that do not fully reflect their strategic value. 

In terms of sub-segments, we are overweight in obesity, neurology, genetic medicine, and rare diseases, where the unmet medical need is high, payer willingness to reimburse is strong, and the pipeline is rich in first- or best-in-class assets. 

We maintain a selective overweight position in China; innovation there is priced at a steep discount compared to U.S. peers, despite increasingly competitive science and improving regulatory frameworks. 

Given the change in market conditions since the summer of 2025, we have deliberately adjusted our weighting scheme to achieve a more equal distribution. In the bear phase, it made sense to concentrate on a handful of robust, de-risked names. In a bull phase, beta and breadth matter more. 

An “equal-weight tilt” enables us to capture upside in smaller and mid-sized names that can move significantly in response to data or M&A. A call materialized recently by Cidara Therapeutics's and Avidity Bioscience's buyouts or Praxis Precision Medicines' results. Obviously, this also comes with risk, as exemplified by uniQure. 

Atonra Bionics – prevention, diagnostics, and monitoring at the core 

For our Bionics strategy, we have shaped it around a clear conviction: 2026 is the year prevention and data take center stage. 

We are overweight in Diagnostics and Monitoring against the peers (60% vs 10-30%), with a particular focus on 

• Genetic testing and oncology diagnostics, especially: 

  • MRD (Minimal Residual Disease) testing is becoming a core decision-making tool in hematology and is increasingly used in solid tumors. 

  • MCED (Multi-Cancer Early Detection), where large-scale trials and policy discussions could redefine cancer screening in the coming decade. 

• Continuous and remote monitoring – cardiac rhythm devices, CGM, sleep, and respiratory monitoring that reduce hospitalizations, catch deterioration early, and fit perfectly in a world moving towards outpatient and home-based care. 

Three structural forces reinforce this overweight prevention stance: 

1. MAHA movement (Make America Healthy Again): political pressure is increasingly focused on reducing long-term costs and improving population health rather than just cutting unit prices. Prevention is the only scalable way to square that circle.

2. Medical data interoperability: regulatory pushes for interoperability and standardized data formats enable diagnostics, monitors, and wearables to feed into meaningful, billable decision support and risk-sharing contracts.

3. Wearable and consumer health adoption: patients and payers are now comfortable with connected devices as part of chronic disease management, which expands the addressable market for Bionics names well beyond traditional hospital procurement. 

On the treatment side of Bionics, our stance differs from that of our peers. We are structurally underweight in pure treatment exposure. Nonetheless, within that pocket, we maintain overweight positions in the fastest-growing treatment-related subsegments, with technologies that shorten the length of stay, reduce complications, and make outpatient or ambulatory procedures viable, namely robotic surgery and robotic assistance, as well as high-value implants and minimally invasive tools. 

In other words, within the Atonra Bionics strategy, we sit at the two ends of the value chain where growth and pricing power are strongest: prevention and data upfront, and High-tech enabling hardware and implants in the procedure itself. This furthered the trend toward automation in healthcare. 

For investors concerned about valuation, our Bionics’ strategy PEG is only 0.6, compared to 1.9 for the Nasdaq 100. Growth is cheaper here than in AI, while demand is far less elastic. 

2026 “make or break” events 

Biotech – the middleman strikes back, but the cycle is different 

In Biotech, 2026 will be shaped by a tug-of-war between: 

• Pharmacy Benefits managers (PBMs) and payers (“the middlemen”) compressing margins through formulary management, rebate pressure, and increased use of international reference pricing. 

• Big Pharma’s need to refill pipelines, which supports M&A and partnering for innovative biotechs, but can be delayed or distorted if policy risk and political noise remain high. 

Risks we are watching closely are 3-fold::

1) PBM power and policy: tighter spread-pricing rules and transparency requirements could push PBMs to extract even more value elsewhere in the chain, often via tougher negotiations with manufacturers. This is a margin headwind for both Pharma and some Biotech. 

2) China's innovation is staying “too cheap”. Suppose China continues to price innovation extremely low. In that case, it artificially depresses global reference prices and can trigger de-rating for U.S. names exposed to international reference pricing or MFN-like schemes.  

3) Pharma capital deployment timing. Any prolonged reluctance from Big Pharma to deploy capital into deals (e.g., due to political uncertainty, antitrust fears, or internal pipeline optimism) could temporarily slow the M&A flywheel that supports biotech valuations. 

To show the importance of the M&A flywheel, the last big 5 M&A of the year brought $11bn of cash in the top15 biotech funds to redeploy. 

But unlike the last big speculative push in 2020–21, this cycle starts from a much healthier base as we are emerging from a long, grinding bear market where many weak players have been cleared out, valuations have reset, and fresh capital is more selective, favoring clinical proof and clear paths to cash flow. A single Phase 3 asset was worth, on average $1.3bn in 2021 but only $730mn today. 

That makes this bull run more sustainable, even if it remains volatile. 

Bionics – prevention policy and coverage decisions 

For Atonra Bionics, 2026 “make or break” events are heavily tilted towards policy and coverage in diagnostics and prevention: 

It would be negative if Congress failed to make progress on: MCED coverage (e.g., stalling on an MCED Coverage Act) or broader efforts to move care from high-cost “in the hospital” settings to lower-cost “out of hospital/at home” settings. 

Conversely, positive strides on MCED coverage frameworks, reimbursement for MRD-guided therapy decisions, and incentives for remote monitoring and data-driven care would significantly accelerate adoption in exactly the areas where our Bionics strategy is overweight.  

We are not talking about a small market either. Today, the diagnostics and monitoring segment of the market represents $250bn (CAGR 2030 6%). In our base case, the addition of a single yearly MCED test for people over 40 in the U.S. at a cost of only $500 per test would represent a new recurring ~$50bn source of revenue. If available in Europe too, this would add ~$65bn. Both markets would push the CAGR 2030 of the whole segment to 14%. 

The recently published 2026 Medicare outpatient rule and the push for site neutrality already point in the right direction: lower reimbursement for high-cost sites, increased support for outpatient settings, and a greater emphasis on transparency and value. Our diagnostics and monitoring names are direct beneficiaries of that structural shift. 

Our Takeaway 

For investors trying to diversify beyond mega-cap Tech and AI, the message is straightforward. 

Biotech companies above ~$1bn market cap with close to the market-ready assets, or Bionic's genetic testing companies with market-ready tests, have, on average, a better chance of turning free cash-flow positive before many of today’s “AI darlings” at far more reasonable valuations and without opaque vendor-financing schemes. 

Healthcare as a whole is still underowned and mispriced relative to its fundamental resilience and growth potential. Within healthcare, Biotech 360° and Bionics are positioned not just to survive the policy and macro noise, but to monetize the transition to targeted, high-impact drugs in Biotech, and preventive, data-driven, lower-cost care models in Bionics. 

In 2021–24, staying overweight healthcare required conviction. 2025 was the reset. In 2026 and beyond, we believe it will finally be adequately rewarded.