Gains in biotechnology show great promise

By Aaron Pickert
Your money

A transformative time is upon us in the field of genomics. No longer science fiction, the scientific breakthroughs occurring right now are truly awe-inspiring. This past weekend a significant first occurred when Intellia Therapeutics reported the first successful gene editing done inside the human body versus outside of it in a controlled environment.

Genomics is the branch of molecular biology concerned with the structure, function, evolution and mapping of genomes. Gene-therapy experiments began in the 1990s, but it took until 2017 for the first to receive FDA approval. In 2020 the Nobel prize in chemistry went to two scientists in the field for the development of Crispr-Cas9. Cas9 is a molecular scissor that can find and edit almost any sequence in a cell’s DNA. The ability to edit DNA sequences offers up the possibility to permanently defeat many of the diseases that ail humanity.

The possibilities are endless, from curing sickle cell anemia and cancers, to creating bacteria that could pull carbon from the atmosphere to act as fertilizers versus petroleum-based chemicals. Where there are only a few genetic therapies approved today, many believe there could be over 100 on the market by the end of the decade.

These breakthroughs don’t come without major ethical questions and whether we should be playing God. No doubt key thought leaders from around the world should continue to monitor and keep public dialogue involved. The promise is overwhelming, yet so are the risks involved in how this could have negative impacts.

The reality is that these experiments and human trials are pressing forward and likely can’t be stopped. Many may have opposition to these gene therapies until something it can cure or reduce the mortality for shows up at their doorstep. All the more reason why regulators and ethical boards must play a powerful part of this path forward.

The prospect of eye-popping investment returns from this sector is enormous. It won’t be easy to know who the big winners are, but if you picked a basket of 10, and just one of them went up 1000%, you would break even if the other nine all went to zero. Hopefully, you can hit a couple of the big winners, along with a few other smaller winners. If you can minimize the downside of the losing ones, you can produce outsized overall returns.

These are still very early days for the field. The road to the investment winners will be a treacherous one. There may be no more difficult and volatile investment field than biotechnology. Investments in this sector require great patience and mental fortitude to allow the winners to emerge.

If you have interest in participating in this field but don’t wish to go it alone, feel free to reach-out to me at ajpickert@stewcap.com. I’ll be happy to help you consider and integrate this into your overall investment plan.

(Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)

Aaron Pickert, CRPC, is chief investment officer at Stewardship Capital in Independence.