Capital has returned to biotech, although investors are becoming more selective. Medtech, meanwhile, is showing early signs of recovery after a difficult year. Pareto Securities' healthcare experts break down the key trends in the sector, including the growing role of AI in research, clinical practice and product approvals.
Christian Lee, Dan Akschuti, Filip Wiberg, Victoria Kloster Havnegjerde, Chien-Hsun Lee and Sead Kadric.
Innovation in Nordic healthcare spans biotech, medtech and pharmaceuticals, with companies working in therapeutic areas ranging from oncology and rare diseases to surgery and cardiovascular disease. Pareto Securities has been active across the sector for many years, completing roughly SEK 35 billion in healthcare transactions since 2019.
We’re proud to have contributed to healthcare innovation through our work with a diverse range of companies across the ecosystem.
Sead Kadric and Victoria Kloster Havnegjerde, Pareto Securities’ Healthcare Investment Banking, when presenting at the 17th annual Healthcare Conference in Stockholm in September
Biotech has renewed momentum, which is visible in public markets. Both the Nasdaq Biotechnology Index (NBI) and the XBI have continued to reach new highs. Chien-Hsun Lee and Dan Akschuti, biotech experts in Pareto Securities’ Zurich-based Healthcare team, point to several factors behind the renewed interest:
We see a renewed investor appetite for healthcare primarily due to clinical successes across multiple disease areas and employed technologies, a continuous pharma deal spree, with Eli Lilly being the record holder, and early gains from AI that will accelerate in the coming 12 months.
Capital in biotech increased from USD 322 billion in April 2025 to USD 464 billion in May 2026. Yet investors have become more selective. Funds investing in biotech now hold an average of 32 stocks, down from 42 three years ago. At the same time, funds with MDs and PhDs on staff have increased by around 50% over the past 4 years, providing another indication that funds have stepped up their due diligence efforts..
One of the most recent signs of the biotech momentum came with the first positive Phase III readout for an mRNA cancer vaccine – which followed multiple other positive clinical news in 2026 from the industry and within oncology specifically. The personalized melanoma therapy, administered in combination with Keytruda, successfully reduced the risk of recurrence and spread (data pending). Each dose is tailored to an individual patient, with AI used to select tumor-specific targets and create a personalized mRNA vaccine.
The market reaction to the positive Phase III data was immediate. On the day of the readout, Moderna rose as much as 177% intraday and Merck gained 12%, adding more than USD 86 billion to their combined market capitalization.
AI is also changing the research process itself. In one benchmark, multi-agent AI systems in 2025 achieved up to 39% accuracy on a research task requiring information to be gathered and connected across several research papers, compared with 83.5% for PhD experts – all of those models are already outdated, implying that today’s models are likely to achieve a higher score and tomorrows might exceed that of human experts.
For capital-constrained European biotech and medtech companies, this gives smaller teams operational leverage previously reserved for larger organizations, helping to narrow the gap with better-financed and/or larger peers.
Chien-Hsun Lee and Dan Akschuti.
Medtech presents a different picture. The median Nordic medtech stock has fallen 21% over the past 12 months, while sector valuations have continued to contract. The low point came in late March and early April. Since then, both share prices and valuation multiples have moved higher, suggesting that the market may have found a bottom.
Part of the turn is being driven by earnings. Q2 2026 saw near-universal beats among US healthcare companies – a significant improvement from Q1. Nordic medtech also delivered a clear step-up versus the previous quarter. Filip Wiberg and Christian Lee, Pareto Securities’ medtech experts, describe a mixed picture:
Beneath the surface, performance has diverged: large-cap medical equipment names have lagged, while diagnostics and US health insurers have outperformed. If estimate revisions turn more positive from here, the setup looks increasingly favorable.
Despite concerns about regulatory turbulence, there are no signs of an FDA slowdown. 510(k) clearance volumes rose by 3.5% in H1 2026 compared with H1 2025, while review times remain at pre-pandemic levels.
The more striking trend is the type of products being approved. AI and software accounted for 13% of De Novo approvals across the full 2021–2025 period, but nearly half in 2026. Since De Novo approvals create new product categories that other companies can later enter through the 510(k) pathway, this points to broader adoption in the coming years.
Beyond product approvals, AI is also beginning to deliver measurable results in clinical practice. At Northwestern Medicine, reported results from the AI-powered documentation system DAX Copilot include 11.3 additional patient visits per physician per month, a 24% reduction in documentation time and an ROI of 112%.
Are you looking for financial advice in the healthcare sector? Get in touch with our Investment Banking team: Sead Kadric, Dan Akschuti and Victoria Kloster Havnegjerde.
Do you have questions about the healthcare sector? Contact our biotech analyst Chien-Hsun Lee or medtech analysts Filip Wiberg and Christian Lee.
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