Curing cancer might become possible, thanks to genomics medicine. In a recent communication, renowned investor Cathie Wood stated that genomics will be one of the most disruptive technologies in the world. But what are genomics and how can an investor play this trend?
Key takeaways on genomics
- Genomics is the study of the genome, composed of DNA which holds the chemical code to guide our growth development and health.
- Improvements in this field may lead to disruption of the healthcare industry, as we will be able to cure diseases we would have never have thought could be solved.
- Renowned investor Cathie Wood is extremely bullish on genomics: she believes this technology will be one of the next major disruptions in our economy.
- There are many stocks and ETFs focused on genomics, which have generated great returns, boosted by the healthcare demand of the pandemic.
I am no scientist: what is genomics?
Genomics is the study of this full genetic complement of the organism called the genome. The genome is the organism’s complete set of genetic instructions. Our body is composed of trillions of cells, with each of them enclosing the complete set of instructions to make our organism, almost like a recipe book. The genome is made of Deoxyribonucleic Acid (DNA), which holds the chemical code to guide our growth development and health.
Single strands of DNA are called chromosomes, and within these chromosomes, sections of our DNA can be read together to forms genes. These genes are what determine our body characteristics, such as height, eye colour, and… our health.
So, what if we could start playing with these and enhance ourselves not to be sick or disabled? That would be great right? I mean, it is great, because the good news is we can.
Latest developments in genomics science and bold statements for the future
The Human Genome Project, launched 30 years ago, had the mission to generate the first map and sequence of the human genome, and succeeded in 2003. What is more, the cost of DNA sequencing has been reduced by a millionfold, meaning an explosion of discoveries and advances in the domain. Today, numerous genomic applications have become common practice, such as prenatal genetic testing, ancestry checking, genetic disease diagnostics, etc.
And the vision for the next phase of human genomics is bolder than ever. The Human Genome Project has made a list of 10 bold predictions for 2030, which highlights the mad advances we have completed so far and gives us a hint of what is coming. Overpromising? Maybe, but remember that we seem to be on the verge of a technological explosion: 90% of all the scientists since the 1900s are alive today. Humanity has never had so many brains devoted to science. Let us have a look at the list:
- Generating and analysing a complete human genome sequence will be routine for any research laboratory, becoming as straightforward as carrying out a DNA purification.
- The biological function(s) of every human gene will be known; for non-coding elements in the human genome, such knowledge will be the rule rather than the exception.
- The general features of the epigenetic landscape and transcriptional output will be routinely incorporated into predictive models of the effect of genotype on phenotype.
- Research in human genomics will have moved beyond population descriptors based on historic social constructs such as race.
- Studies that involve analyses of genome sequences and associated phenotypic information for millions of human participants will be regularly featured at school science fairs.
- The regular use of genomic information will have transitioned from boutique to mainstream in all clinical settings, making genomic testing as routine as complete blood counts.
- The clinical relevance of all encountered genomic variants will be readily predictable, rendering the diagnostic designation ‘variant of uncertain significance (VUS)’ obsolete.
- An individual’s complete genome sequence along with informative annotations will, if desired, be securely and readily accessible on their smartphone.
- Individuals from ancestrally diverse backgrounds will benefit equitably from advances in human genomics.
- Breakthrough discoveries will lead to curative therapies involving genomic modifications for dozens of genetic diseases.
The most fascinating predictions is undoubtedly the last one: genomic medicine could revolutionize world health. What if genetic disorders like Down syndrome, Haemophilia, or cancer were only coding errors which we could fix?
Cathie Wood’s take on genomics
“DNA sequencing is going to introduce science into healthcare decision making for the first time,” said Wood. “We can honestly say that until now more than half of all healthcare decisions were in some part made through guesses or experiences. Now we’re going to have the data.” Cathie Wood is confident that we are going to be able to cure diseases we would have never thought possible, such as cancer.
Ark Invest also proposes a genomics-focused ETF, with big bets on stocks like Exact Sciences, which makes up 5% of the fund’s composition.
How can one invest in genomics?
One of the trendiest ways of investing in genomics has been, as mentioned previously, the ARKG fund, which has seen impressive inflows in the last few years, but there are also other ETFs to choose from:
- ARK Genomic Revolution ETF
- Invesco Dynamic Biotechnology & Genome ETF
- Global X Genomics & Biotechnology ETF
For investors who want to aim for specific stocks, here are the companies which are the most heavily involved with the genomic technology among which:
- Illumina : one of the largest players in the market, Illumina makes gene sequencing machines and reagent kits (stuff changing colour depending on the chemical reaction that occurs). The company is profitable, and each machine creates a constant revenue as consumers need to buy the consumable kits needed to use it.
- Bionano Genomics : build a device which can detect large structural variations in genomes, a usually arduous task for researchers. There will be a increasing demand for this technical analysis, which should ensure a lasting demand.
- Fulgent Genetics : essentially makes diagnostics tools (which were used for covid) but was recently awarded a contract by the Center for Disease Control and Prevention (CDC) to perform a population-level sequencing to help determine and track variants. The company’s range of genetic tests might turn out profits quicker than we think.
- Exact Sciences : Exact sciences is a molecular diagnostics company which focuses on the early detection and prevention of cancer. It is one of the top holdings of the ARKG.
- Co-Diagnostics : Also selling coronavirus diagnostic tests, the company had a tremendous year, with its stock price surging 990%. They are also developing other genetic tests which will keep the company relevant in the long term, although such a spectacular growth is hard to expect with a market getting crowded by other competitors.
There are plenty of other stocks which participate in the genomics revolutions, such as: