Health innovation can help people as well as provide a return on investment | So Good News
By Lori Don
The human body is an amazing machine. At its center is our genetic code, genes form the basic building blocks of life.
Different genes determine different traits
allows human cells to function and helps control how the body grows and functions.
In addition, genetic or otherwise changes or mutations of these genes can be the cause of many diseases. Thus, it is useful for researchers to understand as soon as possible.
Imagine a world where you or a loved one could be screened for multiple types of cancer using genetic markers from a single drop of blood, with a high probability of being cured. This breakthrough technology may not be far off.
At Liontrust Sustainable Investment Group, we believe the topic of healthcare innovation provides an important lens to identify market-leading healthcare companies.
We look for companies with unique intellectual property that deliver strong returns for investors as well as positive outcomes for patients.
Innovations in gene sequencing are expanding our understanding of the human genome while lowering costs. The big cap is US-registered Illumina,
a first mover in the market and one of our holdings has driven this. It is a company with strong research and development investments and
The Human Genome Project, an international scientific research project, managed to sequence our genetic code in 2003 at a total cost of $3 billion after a 13-year effort. Thanks to continuous innovation, this figure has decreased dramatically over time. Illumina recently introduced a new technology designed to reduce the cost of genome sequencing to under $200.
This is a remarkable change achieved by mass-reading genes with a large batch
systems that require sample processing in well-resourced centralized laboratories.
However, the future will be much more flexible than that.
Another of our holdings, UK-based Oxford Nanopore, is pioneering portable devices that can sequence genes cost-effectively and without the need for travel. This is an amazing promise, the business is expected to grow by 30% per year.
This not only has a positive impact on sequencing speed, but also increases access to isolated regions or emerging markets where large-scale laboratories are difficult to find.
For example, Nanopore devices have mapped genes underwater, in a remote Ecuadorian rainforest, and even on the International Space Station.
The value of this genetic sequence information, and its importance to all of us, is that it helps diagnose and treat disease.
To determine the diagnosis, we first know the genetic markers of the disease or pathogen
the patient can be more confident about what is in front of him. It follows that if we can achieve this diagnosis earlier in the course of the disease,
we can strive for much better patient outcomes.
Let’s look at the example of a liquid biopsy. Here, we are looking for genetic markers of early cancer in the blood to detect disease earlier than the usual paradigm of waiting for the tumor to become visible on a CT scan. Grail, an Illumina-owned company, is one of our exposures to this nascent industry.
In terms of treatment, therapies are increasingly targeted at the genetic makeup of individuals with a particular disease. The most powerful example of this is giving a patient a modified version of a gene to initially treat a disease.
Oxford Biomedica and Syncona are examples of holdings that have been exposed to this paradigm.
There is huge growth potential in this space that will benefit both humanity and investors. Remember, only 0.05% of people have any sequence in their genome. Our Liontrust Sustainable Future investment process allows us to understand that healthcare innovation is the early days of opportunity for humanity, science and the companies that enable this progress.
Laurie Don is an investment manager on the Liontrust Sustainable Investment Team.