The emergence of the field of genomics put research, drug development and diagnostics on a new and exciting course. We are still in the early stages of this.
Why human genome projects are important?
A key advancement has been the discovery that several of our most vexing and deadly diseases are caused by genetic mutations. This provides the opportunity to screen and diagnose long before any disease has even manifested.
DNA is an acronym that is often tossed about. It stands for deoxyribonucleic acid. Cutting to the chase, DNA is essentially the recipe for the production of the proteins in your body. Each of us has thousands of proteins in our body and those proteins play a variety of critical roles in human cells.
Genetic disorders are often the result of not having a particular protein, having too much of it or too little of it. Knowing this, clinical researchers can develop treatments to fixing protein-related issues that are causing disease.
What are the investment opportunities in genome research?
Investing in companies engaged in gene-based drug development is hard to do. The payoff can be high, but even if you hit on a company with a breakthrough molecule the odds are against you.
Roughly 90% of drugs that enter clinical trials never reach a commercial stage. Development stage drug companies are well known for having huge price swings even when things are progressing well. In the event of a clinical setback, the first bid can be 50% less than it was just minutes before.
We have found that ideas focused on foundational enabling technologies in genetic research and drug development are better than investing in drug developers. As you have heard before, the general store selling picks and shovels made far more money than the average gold miner in the California Gold Rush of the mid-19th century. The same is true here.
There is a research advantage that can be garnered, we believe, and the businesses are much more predictable.
In our Invesco Global Focus Equity Fund, Illumina, is one we have liked for years and it is among the biggest players in genetic medicine. It is a US-based company that produces about 70% of the genetic sequencing systems at work in the world today. Those systems are used in academia, biotechnology, by drug developers and in diagnostic settings.
Entire companies are built on a foundation of Illumina systems and the world of medicine is moving rapidly towards them. The Covid-19 vaccines developed by Moderna, Pfizer and others were done in a remarkably short period of time after the virus was sequenced on an Illumina system.
Once Covid-19's molecular traits were understood, the solution came quickly. Normally, the median time from clinical development to approval of a vaccine is 9.2 years.
DNA testing is already being used for several cancers. Genetic tests for several types of breast cancer, colon cancer and others are readily available today and widely used already. This is just the beginning.
What is the future?
Over the next several years screening will become available for the early detection of an increasing variety of cancers, well before patients have displayed any symptoms. Illumina will participate in that in a variety of ways.
Cancer, yearly, is the world's second biggest cause of death and early detection of it will be both a big life saver, as well as a big money saver, as early treatment is far less costly to the world's health systems.
Early detection of genetic markers will lead to early management of risk factors in diet, behaviour and treatment. Time is a huge advantage in treatment outcomes and early detection of genetic predisposition will give patients an unprecedented amount of time.
As the field of genomics and genetic medicine advances, for many of the most challenging health problems we have we will have more and more answers for. There are many ways that investors can participate and Illumina is one and we have other in the portfolio as well.
The history of drugs was rooted in chemical formulations, but the future is molecular and biological. Set against an ageing world population, solutions will be required to address many of the diseases that grow in frequency as we age. Genomics and genetic medicine are going to play a big role in that.
Randall Dishmon is portfolio manager of Invesco's global focus strategy