together we are huntsworth

Economic and political uncertainty

The Group is overwhelmingly weighted to lower risk jurisdictions, with over 90% of the Group’s revenues generated from the US, UK and western Europe. Despite some political uncertainties over the past couple of years, particularly in the UK, the wider economic and regulatory environment in our countries of operation has remained relatively stable. Nevertheless, significant policy changes may have an impact, whether in respect of US tax reform, healthcare reform in the US, the outlook of the UK’s future trading relationship with the EU and wider economic policy.

Exchange rate fluctuations

With a majority of profits earned in the US, and a c. £250k impact for each 1c movement in the exchange rate, fluctuations in exchange rates over the past 24 months have had a material impact on the Group’s results. In light of this, to enable a better understanding of the Group’s results, our like-for-like measures exclude the impact of exchange rate movements.

The world is getting older

The global population is getting older all the time. Within 10 years there will be one billion individuals over the age of 60. Over the next 30 years the changes will be even more significant, with global life expectancy rising by eight years, the number of over-65 year olds doubling and the number of over-80 year olds tripling.

The world is needing more healthcare

Demand for healthcare is rising globally, and especially quickly in the US133 million Americans currently have at least one chronic disease, a number expected to rise to 164 million in the next 10 years. This is mirrored in the global demand for prescription drugs, which is expected to grow at an average annual rate of over 6% for at least the next five years.

Pharma growth is resilient

With increasing FDA drug approvals, the drug market is expected to grow at +6% through to 2024, supporting the growth of the healthcare communications market. The orphan drugs market, which is an area of strength for the Group and which is expected to grow at 12% CAGR to 2024, will require more specialist and scientific medical communications together with digitally targeted marketing campaigns.

Growth in biotech

Alongside our key pharmaceutical organisations the biotech landscape is dominating where investment is being made.

There is a growing financial interest in biotech from the venture capital and private equity marketplace. We need to remind ourselves that biotech products are expected to account for 29% of total drug sales by 2022, up from 26% in 2017. This creates additional opportunities for agencies which are best able to navigate the complex regulatory and institutional environment surrounding these drugs. Whilst many market players see the value of working with Biotech there are very few partners who know how to build out the requirements of a Biotech in launching its first commercial asset medically or preparing the organisation for IPO. Huntsworth is enjoying competitive advantage within the biotech space by delivering against a large proportion of the new molecules hitting the global marketplace.

Healthcare is becoming more digital

Pharma is embracing digital transformation as healthcare providers and consumers are both becoming increasingly digital. The ownership of data has changed as healthcare systems are becoming more effective at collecting and analysing data. The rise of on-demand healthcare, big data and predictive healthcare means that there are increasing opportunities to provide services in new ways. The pharmaceutical industry will need to work more closely with healthcare systems as the balance of data ownership keeps shifting. The convergence of marketing and technology creates further focus on innovation.

Healthcare professionals are twice as likely to use online sources than print when making clinical decisions. Globally, over 60% of people use the internet to search for advice on health, medicines or medical conditions, a figure which rises to 80% in the US.

The healthcare ecosystem is expanding through continued positive disruption

The advent of personalised medicine and the rise of genomics increasingly form the basis of asset development and provide solutions for smaller populations of patients.

New technological advances in AI, machine learning, voice, robotic, 3D printers, for example, and finally the powerhouses of e-commerce- Amazon and drone drug delivery for example. Our clients are changing and need support of specialist agencies like ours more than ever.

Consolidation of agencies driving efficiencies

Clients increasingly demand an integrated offering, to avoid the friction and inefficiencies of working with multiple agencies. There is increasing focus on providing multiple offerings between agencies within the Group to foster cross-client workings and opportunities. Within this context it is important to shift away from siloed thinking and to focus on the wider client needs to determine how best to achieve their goals. Increasingly, clients are looking for opportunities to work with fewer agency partners on larger remits – consolidating business to those with proven and differentiated credentials and expertise in all key brand areas.

Increasing pressure on client budgets

Pressures on marketing budgets continue to intensify and there is increasing pressure to justify spend. As a result, there is a demand for better measurement to quantify success and a need to see new ideas and new ways of solving problems.

Disruption of traditional marketing and consultancy

The lines between traditional marketing, advertising, communications and public relations are becoming increasingly blurred. This has led to intensifying competition from new entrants and established players, leading clients to more frequently review the solutions available to them. In this environment, innovative offerings are increasingly rewarded over established ways of doing things.