Soaring inflation and rising interest rates plagued share markets in 2022, ultimately sending the S&P/ASX 200 Index (ASX: XJO) down 5.5%.
Despite being known for their defensive qualities, ASX 200 healthcare shares weren't spared from the pain. In fact, the S&P/ASX 200 Health Care Index (ASX: XHJ) underperformed the broader market, suffering an 8.4% fall.
This index comprises the 12 healthcare shares in the ASX 200. Notably, none of these companies delivered a positive return in 2022. And only one managed to outperform the ASX 200.
Without further ado, let's take a look at the top three ASX 200 healthcare shares of 2022, ranked by share price performance.
CSL Limited (ASX: CSL)
CSL is the largest healthcare share on the ASX. And it just so happens to be the only ASX 200 healthcare share that outperformed the benchmark index in 2022.
Even still, the CSL share price marginally reversed in 2022, dropping 1% or roughly $3 to close out the year at $287.76.
Headlining 2022 was CSL's $16.4 billion acquisition of Swiss pharmaceuticals company Vifor Pharma. The deal was completed in August and diversified CSL's traditional immunology-focused portfolio, expanding its presence into the kidney disease and anaemia management markets.
Since the acquisition was completed after the end of the financial year, Vifor didn't contribute to CSL's FY22 results. These results saw the ASX 200 healthcare giant deliver muted topline growth, which climbed 3% to US$10.7 billion, while net profit after tax (NPAT) slid by 6% to US$2.3 billion.
Due to the long-term nature of CSL's manufacturing cycle, it was still feeling the effects of COVID in FY22. Lockdowns put a clamp on the company's plasma collections, which are a crucial component for manufacturing its treatments. This led to reduced supply and increased costs within its Behring business; challenges that have since significantly improved.
In other notable news, CSL recently announced a CEO succession plan. Paul Perreault will be retiring in March after holding the top job for 10 years. Taking the reins will be Dr Paul McKenzie who currently serves as CSL's chief operating officer.
Cochlear Limited (ASX: COH)
Next up, the silver medal goes to Cochlear, taking out the title of the second best-performing ASX 200 healthcare share in 2022.
The Cochlear share price retraced 5.6% across the year, underperforming the ASX 200 by the smallest of margins. Cochlear shares finished the year at $204.12.
Like CSL, Cochlear also worked through an acquisition in 2022, albeit one much smaller in size. In April, it announced plans to acquire Oticon Medical from Demant A/S (CPH: DEMANT) for roughly $170 million. Oticon is a Danish hearing implant company with a base of more than 75,000 implant recipients.
However, this deal has hit a snag. Last month, the Australian Competition and Consumer Commission (ACCC) outlined "significant preliminary concerns" with Cochlear's proposed acquisition of Oticon.
Not long after, the UK Competition and Markets Authority (CMA) separately made the decision to refer the case to a further phase of review.
In terms of results, Cochlear continued its recovery from COVID in FY22. Cochlear implant unit volumes climbed 5%, contributing to cochlear implant sales revenue of $935 million, up 3% from the prior year. Meanwhile, underlying NPAT jumped 18% to $277 million.
More broadly, in FY22, the company helped more than 40,000 people hear with one or two of its cochlear or acoustic implants. Cochlear estimates this will provide a net societal benefit of more than $6 billion over the lifetime of the recipients from improved health outcomes, educational cost savings, and productivity gains.
Importantly, the company launched its new Nucleus 8 sound processor towards the end of the year, five years on from the launch of the Nucleus 7. This will act as a catalyst for revenue growth as recipients upgrade their devices.
Telix Pharmaceuticals Ltd (ASX: TLX)
Rounding out the podium finishes is Telix, a lesser-known ASX 200 healthcare share involved in diagnostic and therapeutic radiopharmaceuticals.
The Telix share price backtracked 6.2% in 2022, closing the year at $7.27. This gives the company a market capitalisation of around $2.3 billion.
2022 was Telix's first year in the ASX 200. It joined the ranks in February, replacing Sydney Airport which was bought out in a $23.6 billion takeover deal.
But an even bigger milestone for Telix in 2022 was the launch of its first commercial product, Illuccix, in April. Used with PET scans, Illuccix is a prostate cancer imaging product designed to help doctors better detect the presence of cancer cells.
Illuccix has received regulatory approval from the US Food and Drug Administration (FDA) and the Australian Therapeutic Goods Administration (TGA). However, commercialisation in Europe has been delayed.
In the quarter ended 30 September 2022, the second quarter of commercial sales in the US, Telix generated $53.7 million of revenue from Illuccix. This represented a 178% increase on the prior quarter, with sales momentum gathering pace since US reimbursement became effective on 1 July.
With Illuccix launched, the most advanced product in Telix's research and development pipeline is TLX250-CDx, an investigational renal cancer PET imaging agent.
In November, Telix announced "highly positive top-line results" from the phase III study of TLX250-CDx. The study met all of its primary and secondary endpoints, exceeding sensitivity and specificity targets.
Based on these positive results, Telix plans to file a biologics license application with the US FDA and seek marketing authorisation in key commercial jurisdictions around the world.
