Skip to main content

New Frontier of Biotech: Genes!

Want to start with big disclaimer. Even though I have keen interest in science behind biotech and many successful investments (and some spectacular failures), I have no formal education in biotech or for that matter investing in biotech. On top of that, investing in biotech is extremely risky due to binary nature of outcomes. So if you are not a person with extreme risk tolerance, you can stop reading this week's blog (and save few minutes:-)
I got interested in biotech few years back due to science, potential to make outsize gains or losses (almost like bets) and just sheer progress happening in the field (personal situation was also one of the factor due to which I did lot of reading in this area). Last two years I started noticing emerging biotech companies in areas related to "genes". 
In general these companies can be divided in two broad categories:

Gene Therapy: 
  1. "the transplantation of normal genes into cells in place of missing or defective ones in order to correct genetic disorders"
    Surprising lot of research is happening in this field for almost 50 years but successful treatments have started showing up just recently. Few companies to watch are:
  • ONCE ($80) - genetic blinding conditions (approved drug which costs $800K for two eyes), hemophilia(A and B)
  • RGNX ($52) - wet age-related macular degeneration, homozygous familial hypercholesterolemia, Mucopolysaccharidosis Type II
  • VYGR ($20) - advanced Parkinson's disease, amyotrophic lateral sclerosis, Huntington's disease
  • QURE ($33) - hemophilia B, congestive heart failure, huntington's disease
  • BOLD ($37) - X-linked myotubular myopathy (XLMTM), crigler-najjar syndrome, pompe disease 
Since most of them are in early clinical trials (except ONCE), their valuations are hovering around $500M to $2B. Many of these companies are platform companies means they could be applied to multiple diseases.

Gene Editing:

Genome editing, or genome engineering is a type of genetic engineering in which DNA is inserted, deleted, modified or replaced in the genome of a living organism (courtesy Wikipedia). As of 2015 four families of engineered nucleases were used: meganucleases, zinc finger nucleases (ZFNs), transcription activator-like effector-based nucleases (TALEN), and the clustered regularly interspaced short palindromic repeats (CRISPR/Cas9) system
This is relatively new and one of the most promising field of biotech. In fact The CRISPR-Cas system was selected by Science as 2015 Breakthrough of the Year.
Companies in this area are:
  • CRSP ($68) - sickle cell disease and beta-thalassemia. This is one of the most promising company and could start human trial in 2018
  • NTLA ($25) - transthyretin amyloidosis, alpha-1 antitrypsin deficiency, hepatitis B virus, and inborn errors of metabolism programs
  • EDIT ($37) - Leber Congenital Amaurosis type 10, a genetic form of vision loss that leads to blindness in childhood. The company has nice symbol too (EDIT) to suggest "Editing".
  • SGMO ($16) - hemophilia B, Hemophilia A, and Mucopolysaccharidosis I (MPS) and MPS II. This uses ZFN which is older gene editing technology compared to CRISPER-Cas. That's why there is relatively less excitement around this company compared to CRSP.
These companies are opening new frontier of biotech similar to what KITE (got acquired by GILD for $12B), BLUE ($9B) and JUNO (got acquired by CELG for $9B) did 5 years back. I won't be surprised if many of the companies mentioned above get acquired for similar multi-billion $ valuations once their trials reach phase2/3 which should happen over next 3-4 years. Many of them would also fail leaving their valuations to dust. But that's nature of biotech. The "older" biotech companies like GILD, CELG as well as big pharma like PGE, Merck needs new sources of growth. So many of these companies have to acquire these to transform themselves. Last week President Trump signed "Right To Try" bill into law opening doors for many people to get access to these cutting edge treatments even before FDA approval. FDA is lot more friendlier under Trump. So all these factors are definite positive for these biotech.
Biotech investing needs patience and extreme risk-tolerance. If that's not your cup-of-tea, just stay away or follow biotech EFT (XBI)
Looking forward to sunny days of summer!
/Shyam








Comments

Post a Comment

Popular posts from this blog

Clicks to Tokens: Will 2026 Echo 1998's Boom or 2000's Bust?

My "blogging" was in hibernation last 8 months due to my self-imposed restraint given the environment as well as built-in inertia to get started despite so many interesting events and markets reaching all time highs after taking a big dump around "Liberation Day" in Apr...Around that time I had the blog ready that it would be repeat of Mar/Apr 2020 panic and recovery during onset of Covid Pandemic. The hunch happened to be correct and I was glad that I could keep and take some positions which I am still holding especially around AI theme. But that was then...as 2025 is about to wrap up in 10+ weeks, let's look at what's in store for rest of 2025 and 2026. And what's better time than to start writing again just before one of the most important week on the calendar with multiple key events coming up next week... Fed meeting to decide the course of interest rates - it's almost guaranteed that Fed will cut rates by 25 basis points (2nd time in 2025) and...
Post a Comment
Read more

2026: The Year of Convergence – Melt-up, Moonshots, or Mid-cycle Correction?

Happy New Year! After another period of self-imposed hibernation from the blog—partly due to the festivals, travel, intertia and partly to watch the dust settle on a chaotic 2025—I decided to use the quiet of this New Year’s morning to finally reboot.  Looking back at my October post,  “Clicks to Tokens,”  the hunch about the AI theme held firm. We spent much of 2025 debating whether we were in 1998 or 2000. As we enter 2026, the answer seems to be "neither and both." We have the roaring optimism of the 1920s fueled by "Silicon Spirits," but with the high-speed volatility of the 2020s. So, as the calendar flips, what is in store for 2026? Markets may experience melt-up (S&P touching 8000),  with some moonshots (like SpaceX and OpenAI) IPOs or even see mid-cycle correction bringing down S&P to 6000. That's a wide range and will be decided by Four R's... Here are my thoughts on the " Four R’s ":  Rates, Robots, Rotations, and Real Assets. 1. ...
Post a Comment
Read more

Rockets, Relics & Roaring Markets: The $4 Trillion Crossroads of 1927 and 1999

Happy (almost) Summer! After watching Kevin Warsh get sworn in at a White House ceremony two days ago, tracking three S-1 filings that could collectively hoover up more capital than every U.S. IPO since 2022 combined, and watching 26-year-old stock charts finally break to new highs — it felt like the right moment to ask the uncomfortable question out loud. Are we at a party that ends gracefully, or one that ends with the furniture on fire? The market is simultaneously flashing the neon signs of 1999  and  the orchestral excess of 1927. Most commentators reach for the dot-com playbook. I think the original Roaring Twenties is the better map. Here's why... Assembly Lines to AI Clusters Ford's River Rouge complex was the largest industrial facility on earth in the 1920s — raw iron in one end, a Model T out the other. Steel, rubber, and oil became the picks-and-shovels of the age. GE and Westinghouse were electrifying factories and homes. The infrastructure buildout  was ...
Post a Comment
Read more