Transcription of The Stock Network Interview with Bell Potter Healthcare Analyst, John Hester
Lel Smits: Following a year of selective recovery and capital rotation, healthcare remains a structurally defensive sector heading into 2026. Growth has been led by innovation, driving sub-segments including diagnostics, medical technology, imaging, biotech and digital care enablement. I’m joined today by Bell Potter Healthcare Analyst John Hester to unpack the year’s performance signals and the investment landscape forming for the year ahead.
John, welcome to the Stock Network.
John Hester: Thanks a lot for having me.
Lel Smits: Now, what are the key themes and performance drivers over the last year in the healthcare sector?
John Hester: Well, it’s been a real mixed bag though. We’ve seen some really stunning performances, but it’s company specific stuff. The macro environment generally hasn’t been that helpful for biotechs in particular, but there are certainly some standouts. So companies that delivered strong clinical results have generally done better. Balance sheets are important as well. So a couple of things there, but as we look forward into 2026, it promises to be a pretty exciting year.
Lel Smits: Excellent and into 2020, while still rather on this year, which segments do you think held their pricing power best? And where do you see really the strongest re-rating momentum heading into the new year?
John Hester: Pricing power is a really hard term. In healthcare, obviously the drug companies continue to do very, very well. If you have long periods of exclusivity, then your pricing power remains. Generics we don’t like. It’s been a really tough session for companies like Main Pharma and others, for example. So pricing power is all about exclusivity.
And the companies who have that, like Mesoblast, for example, continuing to do very well. The second part of your question related to what was it again?
Lel Smits: The second question, heading into the new year, where do you really see that re-rating momentum?
John Hester: Yeah. So re-rating momentum is going to be driven by a couple of specific things. On the macro level, certainly interest rate cuts are going to be important. We’re talking about potentially the rates in Australia being stable for longer around the current levels. In the US, situation is less clear.
I really don’t know which direction the next rate move is going to be. It’s not for certain what that situation is going to be. So the macro environment is going to be important.
If there are rate cuts, then I think valuations are going to head north. In terms of company specific issues in relation to the healthcare sector in particular, any company that’s got a good asset is going to get a re-rating based on a deal. We’ve seen ImmuTep get a nice deal earlier this week.
That has certainly been positive for their stock. So any companies who can drive a deal, it’s going to be great for them.
Lel Smits: So John, you’ve highlighted some catalysts for the year ahead. Which stocks are you now keeping a close eye on?
John Hester: We’ve just come out with our key picks in the last 24 hours, and there’s a couple of really exciting names on that list. So we’re quite enthusiastic about ProMedicus and Tillix Pharmaceuticals, both of which have got excellent prospects and I think that are good value at current levels. In the speculative category, we like Mesoblast.
It’s obviously had a really good calendar year 2025 with the approval of their Ryansor product, and we expect really rapid revenue growth over the course of the next 12 to 18 months. I also like FortiMedical, which has had a great RS&A conference last week, and also Clarity Pharmaceuticals, also in the radiopharmaceutical space. So talking about radiopharmaceuticals, it continues to be a hot space.
We’ve got five or six listed companies in that space in Australia, so we’re quite well covered there, and we’re watching that space carefully.
Lel Smits: John, I appreciate your insights and look forward to watching this sector in the year ahead.
John Hester: You’re welcome, Lel, anytime.
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