Biotechnology is near a watershed moment. For the first time, gene editing has been shown to work effectively in humans.
According to trial data released Saturday by Intellia Therapeutics, Inc. (Nasdaq: NTLA) and its partner Regeneron Pharmaceuticals, Inc. (Nasdaq: REGN), CRISPR/Cas9 genome editing has been used in humans to improve the standard of care for a rare genetic disease.
For some context, CRISPR/Cas9 is a gene editing tool. The process works in two parts. CRISPR acts as a guide RNA custom-designed to seek out a specific disease-causing gene. The second part, the Cas9 enzyme, is a messenger RNA (mRNA) that performs a precision snip of the problematic gene. From there, natural reparative DNA processes take over.
The technology has been in wide use since 2012, when Nobel Prize winners Emmanuelle Charpentier and Jennifer Doudna first published research.
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Scientists have used CRISPR/Cas9 to improve coffee crops, create better mushroom yields and even reduce the danger of cuttlefish.
But now, the Intellia and Regeneron research brings the science to humans.
ATTR amyloidosis is a rare disease caused by the mutation of transthyretin, or TTR. The protein is mostly made in the liver, and its role is to carry vitamin A and the hormone thyroxine in the bloodstream.
Normally, TTR folds uniformly to provide a good vessel to carry these organic modules throughout the body. However, when it folds abnormally, the process quickly fails. Over time, amyloid deposits build up in other organs, shutting down their normal function.
Currently, a liver transplant is the only viable longer-term option for ATTR amyloidosis patients.
That’s a major reason why this recent news is such a game changer.
Intellia’s NTLA-2001 is a lipid nanoparticle with CRISPR/Cas9. It was deployed to the liver of trial patients with ATTR amyloidosis. The early numbers are impressive.
The treatment reduced serum levels of TTR by 87% in patients who received a higher dose. In addition to being the first successful human trial data, this is better than the current standard of care offered by traditional drug treatments.
It opens the possibility of using gene editing for other diseases. That’s where an especially great investment opportunity could lie.
Catherine Wood — the chief investment officer at ARK Investments — came to national prominence in 2018 when she predicted Tesla, Inc. (Nasdaq: TSLA) shares would rally to a market capitalization of $672 billion.
Two years later, Tesla shares have risen tenfold, and she was vindicated. She correctly identified the colossal business opportunity ahead built on three paradigm-shifting innovations: vehicle electrification, autonomy and self-driving taxicabs.
The ARK Genomic Revolution ETF (BATS: ARGK) holds 60 stocks poised to take advantage of an even bigger paradigm shift: the intersection of artificial intelligence (AI) and gene editing.
As gene editing shows clinical promise, AI researchers are shifting what is possible in computational biology.
For 50 years, biologists have been stumped by the near-random shapes proteins took as they folded. This is important because the 3D shapes of proteins define their function.
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DeepMind, an AI subsidiary of Alphabet Inc. (Nasdaq: GOOGL), found a solution to the folding problem.
Scientists know how to manipulate amino acids, the building blocks for proteins. They can make proteins in the lab. DeepMind’s research makes it possible to also determine what shapes and functions those proteins will assume. In theory, it is suddenly possible to custom design proteins capable of fixing the cell mutations that cause disease. When combined with CRISPR/Cas9, the possibilities are endless.
It’s an event that should create a tremendous amount of value.
Unfortunately, investing in singular biotechnology companies — like Intellia and Regeneron — carries tremendous risk. They are subject to news events from trial data, both internally and from competitors. Buying a basket — in this case with the ARK Genomic Revolution ETF — diversifies and reduces the risk.
It doesn’t hurt that Wood is at the helm either. She has a great track record of finding the right investments at the correct time.
The ARK Genomic Revolution ETF was up 44% in 2019 and 180.6% in 2020. The $9.3 billion fund is currently down 3.4% year-to-date as many biotechnology shares digest 2020’s heady gains.
But that makes it look like an even more attractive opportunity. Morningstar gives ARK Genomic its highest five-star rating.
The Intellia gene editing news is the perfect catalyst to rekindle interest in the once-hot sector.
Longer-term investors should consider adding new positions in ARK Genomic at current levels.
Best wishes,
Jon D. Markman
