Investment Opportunities in the Emerging Market of Hidradenitis Suppurativa

Abstract

Hidradenitis Suppurativa (HS) is a serious skin condition that affects approximately 0.40% of the population. Many moderate to severe patients lack access to effective treatments, creating a significant unmet medical need. This also presents an opportunity for investment in companies developing new treatments for HS. However, investing in HS treatments carries high risks. To manage this, the study applies Modern Portfolio Theory, a financial strategy that evaluates how different HS treatments interact within an investment portfolio to mitigate risk. Using this approach, the research provides a comprehensive analysis of all promising HS drugs, including both those already on the market and those still in development. Through qualitative and quantitative research, the study assesses the likelihood of each treatment's success and estimates its potential share of the HS market. These insights are then integrated into a valuation model, which considers the relationships between different HS treatments. The findings indicate that several high-potential treatments exist in the HS market, with Bimzelx, Sonelokimab, and KT-474 identified as the most promising in terms of revenue generation. Since the market is constantly evolving, the valuation framework developed in this thesis should be regularly updated with new data to maintain a comprehensive and dynamic understanding of the HS market.