Billionaire and millionaire investors are making long-term bets on novel cancer therapies, UBS Wealth Management Chief Investment Officer Simon Smiles said Wednesday.

But these investors are not necessarily buying into biotech stocks, Smiles told CNBC's "Squawk Box." They're placing their money with venture capitalists and investment managers who are focused on firms that are taking academic research through the first-stage, proof-of-concept phase.

Smiles noted that these investments take patience.

"When I talk to our larger clients, our ultra high net worth and billionaire clients, they often look at longer-term things," he said. "They are willing to take a five-, 10-, 15-year view, and so they tend to be focused more on long-term trends like demographics, urbanization, population growth, aging, et cetera."

"At the moment, oncology and cancer therapeutics is definitely something that seems to be taking a lot of focus from our clients."

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UBS believes several novel cancer drug candidates in late-stage clinical trials will be on the market over the next two years and have the potential to drum up multibillion-dollar sales, Smiles told CNBC.

However, quarterly scrutiny during earnings season encourages pharmaceutical companies to focus on projects that pay off more immediately at the expense of more speculative but potentially transformative research, he said.

UBS believes market inefficiency may in part be overcome through impact investing, a strategy that emphasizes putting money into companies that achieve a social good.

Investors in UBS Wealth Management's ultra high net category have a net worth of at least $50 million, though the average balance is higher.