Where Evidence Meets Opportunity | May 2026

Healthcare Investing in a More Discerning Market Environment

Written by: David Mandelbaum, Portfolio Manager

While investor attention remains consumed by the artificial intelligence complex, another profound technological transformation is unfolding in plain sight: the reinvention of medicine.

Market leadership has remained heavily concentrated in companies tied to AI infrastructure - hyperscalers, semiconductors, memory, networking, power, and data centers. That enthusiasm is understandable. AI is real, powerful, and likely to reshape large parts of the economy. But the intensity of that focus has obscured a parallel innovation cycle in Healthcare that may prove equally consequential for society and highly compelling for long-term investors.

Across Healthcare, advances are occurring simultaneously in obesity and metabolic disease, oncology, immunology, rare disease, gene-based medicine, diagnostics, robotics, minimally invasive surgery, laboratory automation, and AI-enabled drug discovery. These developments have the potential to extend life, prevent disease, reduce suffering, improve quality of life, and lower the long-term burden of illness on society.

For investors, this matters because Healthcare is often described as defensive. That characterization is incomplete. Healthcare is one of the most innovative and consequential areas of the global economy. The sector’s leading companies do not merely sell products; they change standards of care, expand what is clinically possible, improve outcomes, and build durable value by addressing medicine’s most significant unmet challenges.

Importantly, this is not a single product cycle or isolated breakthrough. It is increasingly a self-reinforcing innovation flywheel. Advances in biology, diagnostics, data science, laboratory automation, and therapeutic development are feeding into one another. Better tools generate better data; better data improves biological understanding; better understanding enables more targeted medicines and technologies; better products generate more evidence, investment, and clinical adoption. The result is a healthcare innovation cycle that can persist, broaden, and compound over time.

From Treating Disease to Preventing It

For most of modern medicine, healthcare has been fundamentally reactive. Patients became sick, physicians diagnosed disease, and therapies attempted to slow progression. That model is beginning to change.

GLP-1 therapies have demonstrated something that extends far beyond obesity treatment: pharmaceutical innovation can reshape behavior, prevention, and long-term health outcomes at population scale.

These medicines have expanded the public conversation around prevention, cardiometabolic risk, and the connection between obesity, diabetes, heart disease, kidney disease, liver disease, and other chronic conditions.

At the same time, advances in lipid lowering, cardiovascular risk reduction, metabolic disease management, diagnostic testing, and preventive screening are moving the system toward earlier intervention. The economic implications are significant. Preventing disease is more valuable than treating disease after organ damage, disability, hospitalization, or loss of productivity has occurred. Every year of healthy life preserved creates value for patients, employers, insurers, governments, and society.

GLP-1s may ultimately be remembered not simply as a successful drug class, but as one of the clearest proofs that healthcare can move from a treatment model toward a prevention model at population scale.

Biology Is Becoming More Programmable

One of the most important developments in modern science is that biology increasingly resembles an engineering discipline. Gene sequencing costs have collapsed. Genetic datasets have expanded dramatically. RNA-based therapeutics have demonstrated commercial viability. Gene editing technologies continue to mature. Precision medicine approaches are allowing therapies to target specific biological pathways with increasing specificity.

This does not mean biology has become easy. Human disease remains complex, redundant, and unpredictable. But the direction of travel is clear: drug development is becoming more informed by causal biology, genetics, biomarkers, and increasingly sophisticated translational tools. The industry is moving from trial-and-error experimentation toward a more systematic understanding of disease mechanisms.

That shift matters for investors because it can expand the range of addressable diseases, improve the probability of technical success in certain areas, and create durable platforms rather than one-off products. Companies that can repeatedly translate biological insight into clinically meaningful medicines may compound value for many years.

The Hard Problems Are Beginning to Yield Ground

Some of the most exciting areas of innovation are occurring in diseases that historically represented the hard problems of medicine: cancer, Alzheimer’s disease, neurodegenerative disorders, autoimmune disease, and rare genetic conditions.

Cancer remains extraordinarily complex, but the field has continued to evolve from blunt cytotoxic approaches toward targeted therapies, immunotherapies, antibody-drug conjugates, bispecific antibodies, radiopharmaceuticals, and increasingly sophisticated diagnostics. Earlier detection technologies, liquid biopsies, molecular profiling, and companion diagnostics may help move treatment closer to the point at which intervention is most effective.

Neurodegeneration remains one of the most difficult areas in all of medicine, but even here the trajectory appears less stagnant than it did a decade ago. The first disease-modifying approaches in Alzheimer’s disease are imperfect, but they may represent the beginning of a longer innovation cycle rather than the end of one. As diagnostics improve and biological understanding deepens, the opportunity to intervene earlier and more effectively should expand.

Many of these diseases will remain hard, and many programs will fail. But the range of serious diseases that now appear scientifically addressable is broader than at any prior point in modern medicine.

Devices, Diagnostics, and the Technology of Care

The medical innovation cycle is not limited to therapeutics. Devices, diagnostics, robotics, and technology-enabled care are also changing how medicine is practiced. Robotic surgery and minimally invasive approaches can improve precision, reduce complications, and shorten recovery times. Structural heart technologies are expanding treatment options for patients who historically had few alternatives. Continuous glucose monitoring has turned diabetes management from episodic measurement into real-time feedback. Advanced diagnostics, imaging, and molecular profiling can detect disease earlier, stratify risk more effectively, and guide therapy selection.

These businesses often do not receive the same narrative attention as AI infrastructure or breakthrough drugs. But they are essential to the modernization of healthcare. They help translate science into practice. They improve workflow, reduce friction, enhance precision, and allow health systems to do more with constrained resources. In a system facing rising demand and limited labor supply, technologies that improve productivity and outcomes should become increasingly valuable.

AI as an Accelerator of Biology

The current market often frames AI and Healthcare as competing destinations for capital. We think that is the wrong framing. One of the most important beneficiaries of artificial intelligence may be Healthcare itself.

AI is already being used to analyze biological datasets, identify drug targets, design molecules, improve clinical trial design, interpret images, automate laboratory workflows, and accelerate scientific iteration. The laboratory of the future is likely to be more automated, more data-rich, and more computationally directed than the laboratory of the past. Robotics, machine learning, and biological data may shorten discovery cycles and increase the number of experiments that can be run at scale.

AI may not replace the complexity of biology, but it can help scientists ask better questions, generate better hypotheses, and move more quickly through the discovery process. In that sense, Healthcare may ultimately prove to be one of the most important real-world applications of the AI revolution.

Investment Implications for Benestar

The investment implication is not that every innovative healthcare company will be a good stock. Scientific excitement and investment merit are not the same thing. Valuation, reimbursement, competitive durability, execution, policy risk, balance sheet strength, and commercial scalability all matter. The task is not to own innovation indiscriminately. The task is to identify the companies capable of converting innovation into durable earnings growth, high returns on capital, and long-term cash flow compounding.

This is where public-market healthcare investing requires both imagination and discipline. Imagination is necessary because the scale of the opportunity is large and the scientific progress is real. Discipline is necessary because healthcare innovation is uneven, heavily regulated, clinically complex, and often overcapitalized in areas where enthusiasm runs ahead of evidence.

Benestar’s approach is designed to sit at that intersection. We seek to own businesses aligned with the long-term drivers of value creation in Healthcare: companies with strong competitive positions, evidence-based products, attractive economics, durable growth, and the ability to benefit from secular innovation while managing regulatory, policy, and clinical risk. In some cases, that means owning the companies developing transformative medicines. In others, it means owning the tools, services, technologies, and platforms that enable the broader innovation ecosystem.

The market’s current indifference toward much of Healthcare does not eliminate near-term risk. Sector flows can remain negative, policy concerns can weigh on sentiment, and earnings cycles can take longer to turn than investors expect. But long-term value creation is rarely driven by near-term popularity. It is driven by the ability of companies to solve important problems at scale while earning attractive returns on capital.

By that standard, we believe Healthcare remains one of the most compelling areas of the equity market for investors willing to look beyond today’s narrow leadership and focus on durable value creation over time.

If you’d like to discuss how a more selective, evidence-driven approach may fit within your broader portfolio, we invite a confidential conversation with our investment team.

Disclaimers

David Mandelbaum is solely an investment advisor representative and a lead portfolio manager of OnePoint BFG Wealth Partners, a registered investment adviser. Investment advisory and financial planning services offered through Bleakley Financial Group LLC, an SEC registered investment adviser, doing business as OnePoint BFG Wealth Partners. 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The market and economic data is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The information in this report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy and completeness.

Nothing in this material should be construed as investment advice offered by OnePoint BFG Wealth Partners or David Mandelbaum. This market commentary is for informational purposes only and is not meant to constitute a recommendation of any particular investment, security, portfolio of securities, transaction or investment strategy. No chart, graph, or other figure provided should be used to determine which securities to buy, sell, or hold. No representation is made concerning the appropriateness of any particular investment, security, portfolio of securities, transaction or investment strategy. You should speak with your own financial professional before making any investment decisions.

Past performance is not indicative of future results. Neither OnePoint BFG Wealth Partners nor David Mandelbaum guarantees any specific outcome or profit. These disclosures cannot and do not list every conceivable factor that may affect the results of any investment or investment strategy. Risks will arise, and an investor must be willing and able to accept those risks, including the loss of principal.

Certain statements contained herein are statements of future expectations and other forward-looking statements that are based on opinions and assumptions that involve known and unknown risks and uncertainties that would cause actual results, performance or events to differ materially from those expressed or implied in such statements.

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