With treatments designed especially for each patient, personalized medicine is becoming more and more popular thanks to advancements in genomics
James Mackreides advises astute investors to invest right away.
Earlier this month, the use of genetic engineering to bring the "dire wolf" back from extinction made headlines.
Although it may not be as dramatic, the magic that occurs behind the scenes is just as amazing.
The application of genetics in medicine, or genomics, is revolutionizing disease diagnosis and treatment by allowing for individualized care.
The creation of gene therapies that treat illnesses directly rather than preventing them from developing is also "rapidly advancing," according to Daniel Lyons, a portfolio manager with Janus Henderson Investors' healthcare and biotechnology teams.
Research is still being conducted to increase the safety and effectiveness of treatments, and early manufacturing and delivery challenges have been resolved.
Knowledge advances and costs fall.
Geoffrey Hsu of the Biotech Growth Trust says that as costs have dropped recently, the potential of these developments for investors has increased quickly. In 2003, mapping the human genomethe basic genetic material that serves as a blueprint for our cellscost the Human Genome Project £2.7 billion. An entire human genome can now be sequenced for £1 million, just four years after the initial cost. These days, laboratories can complete the task for a few hundred dollars.
According to Neil Ward, vice president and general manager, EMEA, PacBio, this has made it possible for a number of massive projects to emerge that depend on the sequencing of numerous individual genomes in order to better "understand the underlying genetics of many diseases." Ten thousand donors of blood and tissue samples to Estonia's national biobank had their genomes sequenced by his company. "This is just the beginning," Ward says. Scholars worldwide have indicated a desire to conduct comparable studies.
Britain's Our Future Health project, a public-private partnership involving the NHS, pharmaceutical companies, and healthcare charities, is arguably the most ambitious plan. "By monitoring the health of a large sample of people over time, we hope to better understand the risk factors behind various diseases, whether they have their roots in genetic, lifestyle, or environmental factors," says Raghib Ali, the chief medical officer and CEO of the project.
In order to further our understanding of the connections between our genes and disease, the project will rely on the genetic sequencing of blood samples provided by the 2.4 million participants (Our Future Health is still recruiting, see ourfuturehealth . org . uk/get-involved).
Quick advancements in diagnosis.
According to Ward, the declining cost of sequencing is providing physicians with a valuable tool for identifying uncommon genetic illnesses. There are many such conditions, but they typically only affect a small number of patients each year, and it may take years for a patient to receive a definitive diagnosis after they first exhibit symptoms. Diagnostic tests utilizing genetic sequencing can significantly expedite the procedure.
We are not yet at the point where we can quickly diagnose every person because we still don't fully understand the genetic basis of illness. Moreover, the majority of tests currently in use are made to detect a single condition at a time, which frequently results in a tedious and annoying process of trial and error. However, scientists at Radboudumc in the Netherlands are trying to combine the different genetic tests that are currently available so that doctors can screen for several conditions at once and provide conclusive results in as little as a week.
The International Biotechnology Trust's portfolio managers, Ailsa Craig and Marek Poszepczynski, say that routinely screening entire populations for more prevalent conditions is becoming more affordable due to cheaper tests. The concept of routinely screening newborns for genetic conditions was unheard of just ten years ago, but many nations now have some kind of program in place. Screening for spinal muscular atrophy (SMA), which can now be treated before symptoms appear, is one example.
Indeed, sickle-cell disease, congenital hyperthyroidism, and cystic fibrosis are among the numerous genetic disorders that are now regularly checked for right after birth, according to Hsu. Naturally, as our understanding of genetics advances, the number of diseases that are screened for will only increase, according to Hsu. The realization that "knowing that someone has a disease becomes more important once you can actively do something useful with that knowledge" will also encourage screening programs as new treatments for these conditions are developed.
The possibility that genetics could determine whether a person has a higher chance of developing a particular condition in the future that they do not currently have is also gaining attention. There are already screening programs in place to identify the genes most strongly associated with a given disease. For instance, screening for the BRCA1 and BRCA2 genes is now available to women with a family history of breast cancer. These genes significantly increase the risk of ovarian cancer and raise the lifetime risk of developing breast cancer from 12 to 5 percent to about 70 percent.
According to Ward, we might soon be able to identify the genetic variables that raise the chance of contracting a specific illness in more nuanced ways. For instance, in Estonia, the goal is to use the biobank data to determine who should be screened for cancer sooner rather than later and who should be given priority screening. By doing this, you should be able to save money and increase detection rates. Genetic tests will be available in five to ten years to determine a person's susceptibility to specific cancers and their likelihood of contracting diseases like Alzheimer's, according to Ali.
The growth of customized healthcare.
Additionally, genomics is beginning to assist medical professionals in customizing treatments. As Bellevue Healthcare Trust portfolio manager Paul Major notes, it has long been known that therapies that are effective for one patient may not be effective for others with the same ailment.
Knowing that some patients would fare better than others, the medical community had until recently accepted this luck of the draw.
By using genetics, we should be able to remove this element of chance and allow physicians to prescribe medications that are most effective for each patient based on their genetic profile.
When it comes to diseases like cancer, this can be crucial. For instance, one medication may be just as effective overall as another, but it may work especially well for a particular patient subgroup, Major says. Likewise, individuals who possess a specific genetic profile might be significantly more susceptible to adverse drug reactions than those who do not.
In clinical trials, these factors may save valuable medications from being discontinued. For instance, if a medication shows promise for a subset of patients, it may be repurposed instead of being discarded because of side effects or low effectiveness in the entire patient group.
In addition to the patient's genetic profile, personalized healthcare can focus on other aspects. The most crucial element in choosing the best course of treatment for cancer, for instance, may be a development in our knowledge of the tumor's genetic makeup.
Craig and Poszepczynski state that "even as recently as 30 years ago, physicians tended to consider all cases of lung cancer as basically similar." They now understand that the specific mutation in the patient's tumor's genetic code determines the type of lung cancer.
Because of this, it is becoming more and more common for doctors to take a biopsy of the tumor and send it to a lab to identify its type and, consequently, the most effective treatment.
This is becoming more and more common due to the declining cost of genetic screening, which can be repeated several times to allow for the modification of treatments as the disease worsens.
Genome redesign.
Additionally, gene therapies that directly treat illnesses are being made possible by genomics. According to Craig and Poszepczynski, the process that is currently popular involves inserting a corrected version of a defective or absent gene into a person's genome using a modified virus.
Although this method has been used since the 1990s, at that time, "we didn't know much about where (or how) to insert the gene, which resulted in genes ending up in random places, leading to patients getting cancer rather than being cured." The science has advanced recently, leading to improved gene targeting and increased success rates.
Gene therapies are also getting a lot more resilient. According to Craig and Poszepczynski, our bodies can eventually recognize that a gene has been inserted and attempt to eliminate it, much like in organ transplants, where there is a risk that the immune system will reject and fight the organ because it perceives it as foreign.
After that, the inserted gene starts to function less effectively, which may cause the condition to recur. Researchers are making strides in addressing this issue and extending the useful life of genetic treatments.
According to Hsu, these developments are significant because the industry is predicated on the notion that healthcare systems will be prepared to shell out a substantial sum of money up front for a one-time course of treatment in the hopes that doing so will spare them from later having to shell out a significantly larger sum for medications to treat the ailment.
Even genetic therapies that cost millions of dollars can be more cost-effective than using medications to treat severe hemophilia, which can otherwise cost up to £500,000 annually in the United States. However, this is only true if the disease does not recur.
Andrew Craig, author of Our Future is Biotech: A Plain English Guide to How a Tech Revolution is Changing Our Lives and Our Health for the Better, says that other kinds of genetic therapies are also beginning to appear. Better and more accurate gene editing is possible with Crispr (clustered regularly interspaced short palindromic repeats) therapy, which should, in theory, allow us to treat any genetic disease at its root. Although the procedure is currently costly, in 2023 a Crispr treatment for sickle-cell disease was approved, meaning that "what was previously considered a...... A potentially fatal illness has been successfully cured.
Medical advancement is another promise of CAR-T therapy. This entails reprogramming the immune systems' T-cells genetically to combat cancer more effectively. With a "remarkable" response rate of about 80%, this has already given some "pretty incredible results" in treating diseases like acute lymphoblastic leukemia, which mainly affects children. There are also other treatments being developed.
A robust pipeline of novel treatments.
For the subsector, there are some clouds in the horizon. Alex Hunter, global equity analyst at Sarasin and Partners, says that some investors appear to have been alarmed by Peter Marks' recent departure from the US Food and Drug Administration's (FDA) Centre for Biologics Evaluation and Research division. Marks was regarded as a "champion of innovative therapies, such as cell and gene therapy."
Gene therapy development and approval could become "slower and temporarily more problematic" due to redundancies at the FDA and US National Institutes of Health.
According to Craig and Poszepczynski, however, these worries are exaggerated. United States Health Secretary Robert F. They point out that although Kennedy Jr. was "very vocal about vaccines," he "hasn't really said anything negative about gene therapies."
Regardless, "there would be a massive public outcry in the United States if the FDA tried to prohibit or limit access to gene therapy" due to the power of patient advocacy groups that fight for people with rare diseases like Huntington's or Duchenne muscular dystrophy.
According to Karin Hyland, a partner and deputy head of co-investments at Patria Private Equity Trust, the US is likely to expedite and simplify regulatory pathways instead, and new gene therapies will keep landing on the market. "Material advances in gene therapy in the coming years, alongside improved affordability and availability" will follow from this.
With more than 1,200 gene therapies presently undergoing clinical trials worldwide and 38 approved by the FDA, compared to just five when Hyland began investing in this field in 2000, it is evident that gene therapies are on the rise.
The greatest investments available right now.
The precision medicine startup CareDx (Nasdaq: CDNA) is one that shows promise. According to Paul Major of Bellevue Healthcare Trust, its genetic testing is the "gold standard" for surgeons looking to pair patients with donated organs in order to reduce the likelihood of organ rejection following transplantation. Its tests also alert physicians when the body begins to reject an organ, allowing them to modify medicationa critical function considering the limited supply of donated organs. Even though revenue more than doubled between 2019 and 2024, the stock is currently trading at just 18 times 2026 earnings.
According to Paul Major, it is "difficult and expensive" for clinics and hospitals "to keep up with this continually evolving technology" because the field of personalized medicine is changing daily. Thus, it makes sense for them to hire NeoGenomics (Nasdaq: NEO) to handle the genetic testing of blood and tumors. The company takes tissue and blood samples from hospitals, selects the appropriate equipment and tests, and then provides doctors with information about the type of cancer, its stage, and the most effective treatment. The stock is trading at 26 times its 2026 earnings.
The US regulator approved Krystal Biotech's (Nasdaq: KRYS) gene therapy for dystrophic epidermolysis bullosa two years ago, according to Ailsa Craig and Marek Poszepczynski. The risk of skin cancer in children is increased by this genetic skin condition. The fact that the firm's treatment is administered as a cream is what stands out the most. Krystal is developing additional gene therapies, such as ones for cystic fibrosis and other skin conditions. The stock price is 14:5 times its 2026 earnings.
Compared to the other investments suggested here, UniQure Biopharma (Nasdaq: QURE), a biotechnology company, is a riskier investment because it is currently losing money. However, the company's gene therapy for Huntington's disease is in late-stage trials, and in addition to an approved treatment for hemophilia (in collaboration with CSL Behring), it may submit an application for regulatory approval in as little as a year, according to Craig and Poszepczynski. This "may prove to be a revolutionary remedy for a debilitating illness." Additionally, gene therapies for Alzheimer's disease, ALS, epilepsy, and Fabry disease are being developed.
MeiraGTx Holdings (Nasdaq: MGTX) is an additional option that carries a high risk but also has the potential for high reward. Despite its current financial losses, Karin Hyland of the Patria Private Equity Trust believes the company could gain from regulators' efforts to expedite gene therapy approval, particularly in light of its successful trials in the UK where its gene therapy treatment for childhood blindness was able to restore the patients' sight. In addition, it is developing gene-based treatments for Parkinson's disease, ALS, and genetic obesity. Early clinical trials showed promise, especially for the Parkinson's treatment.
One company that Andrew Craig especially admires is Oxford BioMedica (LSE: OXB). It created a lentiviral vector for CAR-T therapy after being spun out of Oxford University in the 1990s. Craig explains that it is "such a good example of British scientific innovation" because it has successfully reduced the cost of creating the vector by 90% and "has stated that it expects to bring down the cost by another 80% to 90% over the next few years." It could not only begin to make money but also make a sizable profit if it succeeds in doing so.
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