Biotech
Treating the Untreatable with Precision Therapies – A $4 trillion Opportunity?
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Precision Therapies For Targeted Results
Precision therapies have always been the ultimate goal of medicine. Instead of drugs acting on multiple parts of the body, these therapies would only target one organ, one cell, or even one gene.
In theory, not only would this be a lot more efficient, but it would also dramatically reduce side effects and allow the cure of diseases that have so far resisted treatment, from genetic diseases to paralysis or even cancer.
With progress in the understanding of biology and biochemistry, this is finally becoming possible. The pandemic has shown the power of mRNA technology. Plenty of equally powerful tools have been discovered in the last 1-2 decades: CRISPR gene editing, base editing, CAR-T, RNAi, siRNA, zinc-fingers, etc.
From theories or niche ideas, these technologies are now making a large part of the biomedical R&D effort. In 2023, more than 25% of clinical trials were harnessing new therapeutic modalities.
Source: ARK Invest
A Revolution Arriving Just In Time
And the surge in clinical trials relying on precision therapies could not have come at a better time. In the last 20 years, the budget for finding new drugs has grown constantly, but the financial returns have been less than impressive.
Source: ARK Invest
This trend persisted until 2016-2020, with an unexpected rebound, thanks to precision therapies. This trend reversal was further confirmed by an even larger rebound in incremental revenues compared to R&D spending in 2021-2023.
So far, this rebound in medical research yields has been mostly driven by innovative cancer therapies. This was mostly done through the use of custom antibodies and cell therapies.
But with the approval of the first CRISPR gene therapy in 2023, the floodgates might be opening for a generalized cure of most genetic diseases in less than one generation.
Source: ARK Invest
RNA therapies and precision small molecules could solve the rest of medical concerns, including non-genetic rare diseases, neurodegenerative diseases, and infectious diseases.
Precision Therapies
Targeted Protein Degraders” (TPDs)
Only 864 out of 20,000 proteins in the human body are currently targeted by FDA-approved drugs. This is just 4% of the total, with another 17% potentially targetable. This is mostly due to the extreme difficulty of finding a chemical compound that efficiently targets a specific protein.
A new technology, TPDs, could target 56% of the total human proteome (the whole catalog of proteins, the way the genome is for genes). This could bear massive results in untreatable diseases associated with abnormal proteins, like Alzheimer's Disease.
Source: ARK Invest
Rare Diseases
Most rare diseases are associated with premature deaths, as well as poor quality of life. Current treatments mostly focus on managing the symptoms as well as possible, which are mostly poorly improved.
This means that rare diseases, like, for example, sickle cell disease (SCD), cause massive costs over time, often measured in millions of dollars per patient during a lifetime.
Source: ARK Invest
As a result, precision therapies like CRISPR gene therapy could be life-changing and profitable for society at large, even if coming with a 6- to 7-digit price tag.
The US spent around $450B per year on treating rare diseases. A cure for every rare disease (mostly caused by genetic problems) would represent from 8 to 16 trillion dollars saved over the next 50 years. And, of course, this is by looking at it from a purely accounting point of view, not including the reduction in human suffering and needless deaths.
Source: ARK Invest
RNA therapies
mRNA is now well known for its possibilities in treating infectious diseases. This concept is going to be expanded quickly thanks to the efforts of companies like BioNTech and Moderna.
They are also working on deploying mRNA toward cancer therapies, both topics we explored more in-depth in our article “The Next Application for mRNA Technology: Cancer Therapies”.
Other types of RNA, like RNAi, siRNA, ASOs, miRNA, and asRNA, can also be leveraged for innovative therapies. Each has unique medical potential, which we explored in our article: “RNA Based Therapeutics are Gaining Traction: What Are Investors Options?”.
A Massive & Growing Market
ARK Invest's research led them to forecast a tremendous opportunity in this sector:
The enterprise value of companies focused on precision therapies could appreciate 28% at an annual rate during the next seven years, from ~$820B in 2023 to ~$4.5T by 2030.
Source: ARK Invest
This is impressive but also makes sense when taking into account the massive gain in both health and healthcare costs these therapies can bring.
The recent approval of the first CRISPR therapy for sickle cell disease, Casgevy, from Vertex Pharmaceuticals (VRTX) and CRISPR Therapeutics (CRSP), came with a price tag of $2.2M per patient.
You can read more about Vasgevy approval in our article “Sickle Cell Disease Gene Therapies Approved by FDA Highlighting Potential of CRISPR/Cas9 Technologies”.
The FDA also announced another sickle cell disease gene therapy, Bluebird Bio's lentiviral therapy, Lyfgenia, at a $3.1M price tag. So not only do these therapies save lives, but they can also prove extremely successful for the companies that made them possible.
ARK’s Precision Therapies Stocks
1. CRISPR Therapeutics
As the company that made history with the first CRISPR gene therapy to ever be approved, it makes sense for CRISPR Therapeutics also to be the second largest holding in the ARK Genomic ETF.
Source: ARK Invest
Casgevy's approval is by far the biggest news for the company, as it validates the potential of CRISPR technology as an actual lifelong solution for uncurable genetic diseases.
Reducing CRISPR Therapeutics to a “genetic disease” biotech would be, however, too reductive. The company also has clinical trials for CAR-T therapies and cardiovascular diseases.
Ultimately, by far, the largest potential is in CRISPR Therapeutics' diabetes therapy, developed in collaboration with Vertex (as was Casgevy). This could be a much larger potential market, with the total number of patients an order of magnitude larger than for the now-approved hemoglobinopathies.
Source: CRISPR Therapeutics
2. Exact Sciences Corporation
Cancer is especially deadly because it is often a silent disease. Most of the time, symptoms get visible only when it is already too late. This is why early detection can radically improve the survival rate of cancer patients.
For successful monitoring, the technology must be non-invasive and cheap enough to run regular testing.
This is the idea behind Exact Sciences, which is using both DNA & RNA data to detect early cancer, which “simple” DNA tests might miss. Exact Sciences is the largest holding in ARK Genomics ETF.
This detection method also gives much more insight into the characteristics of cancer and opens the door for more targeted therapies.
The company develops solutions for all stages of cancer detection.
Source: Exact Sciences
Such cancer detection is done from a simple blood sample and is also called liquid biopsy.
In the long term, liquid biopsy will likely become routine testing, as early cancer detection is a lot cheaper (and safer) than finding it later, making it a very cost-efficient option for insurance and society at large.
3. Ionis Pharmaceuticals, Inc.
While mRNA has been spotlighted in the last 3 years, RNA is a complex molecule with many other sub-types. Among them are micro-RNA (miRNA) & antisense-RNA (asRNA).
They are naturally occurring RNA that do not encode any genes. Instead, they regulate standard mRNA activity, changing the cells' genetic activity. Both miRNA and asRNA have been discovered to be involved in multiple diseases.
Ionis Pharmaceuticals(IONS) is a leader in antisense-RNA therapies. It is also the the 7th largest holding in ARK Genomics ETF, its 3rd largest in precision therapies, and its largest holding dealing with RNA-based therapies.
It currently has 4 commercialized drugs and a rich pipeline of potential new drugs, of which 10 are in phase III of clinical trials:
- 11neurological therapies.
- 6cardiovascular therapies.
- 2rare disease therapies.
- 7other diseases (Hepatitis B, kidney diseases, etc…)
Ionis has also created a joint venture with RNAi-leader Alnylam (ALNY): Regulus (RGLS). The joint company will use unique patents from both companies to create synergies between the 2 companies' proprietary technologies.
How far RNAi, miRNA, and asRNA can go as a therapeutic class is yet to be seen. But if mRNA taught us anything, we are just at the beginning of applications relying on induced or regulated gene expression. RNA molecules will be central to this new field of biotech and medicine.
