Biotechnology is the personal science of the future. Biotech investing is worthwhile for the companies' growth potential and future income. But it’s personal too. If biotechnology will help people live longer, the rich will need to be even richer to finance their longer lives.
Do you want to live forever? If the claims being made for epigenetics prove right, it could well become a lifestyle choice.
Epigenetics is an increasingly popular branch of the biotech sector. As its name suggests, it is related to the study of genes, or genetics (a scientific study of the effects that genes – units of heredity – have on an individual).
Genes by themselves represent a passive storage of information comparable to a library teeming with books. Epigenetics is equivalent to a skilled librarian who helps the reader find the right books.
In slightly more scientific terms, epigenetics is defined as the study of changes in cells/organisms caused by the modification of gene expression.
Pathway to personalised medicine
Targeted modifications adjust activities of the right genes, helping to adapt the body to external and environmental factors. This is rather than relying solely on rare alteration of the underlying DNA sequences of genes.
In short, epigenetics could be the pathway to what is popularly known as personalised medicine – the ability to prescribe therapeutics tailored to the patient’s predicted response or risk of a disease.
This can deliver two great benefits on the healthcare provider side of the equation: save money and improve patient care.
Arguably of greater importance to drug manufacturers is the commercial opportunity that this could present. It would enable them to differentiate their products better, accelerate drug development timelines and charge higher prices.
In a classic win-win situation, benefits would also accrue on the patient side. Not the least of which would be individually targeted treatment that could begin taking effect immediately.
A great number of drugs in the world will not help a significant minority of people. Methotrexate, a commonly prescribed anti-arthritis drug, doesn’t work on 40% of people, explains Christian Hoyer Millar, chief executive officer of Oxford Byodynamics (OBD), an epigenetics specialist company.
OBD was spun out from Oxford University in June 2007. Its aim was to translate fundamental scientific advances into a commercialised platform technology and a new generation of biomarkers for cancer and other diseases.
It floated on London’s Alternative Investment Market (AIM) on 6 December 2016 in a deal worth £20m (€23m).
The decision to float was a strategic move rather than a funding round. Holding around £7.5m (€8.6m) in cash, OBD did not need the money from the listing.
An important factor in the decision to do an initial public offering was the belief that going public marks an important step. It demonstrates that the company is increasingly commercial rather than a pure research house.
The company has ambitious growth plans. Christian Hoyer Millar hopes it will list on NASDAQ within two to three years.
It is easy for even the lay person to see that prescribing drugs blind to someone who won’t benefit from them wastes money and time.
As Simon Kuper said in his Opening Shot article in the Financial Times magazine supplement on the weekend of 18-19 March 2017, personalised medicine should accelerate the upward trend in life expectancy. “Rich people will pay to replace bad genes and failing body parts,” he wrote.
Perhaps this explains the sector’s popularity with private equity, venture capital and development capital investors.
The February 2017 M&A review by business information specialist Bureau van Dijk provides a snapshot of mergers and acquisitions activity in the biotech sector.
All of February’s largest PE, VC and DC investments in biotechnology stocks took the form of minority stake investments or funding rounds.
The largest was worth $74m (€79.5m). It involved US cancer treatment drugs developer PMV Pharmaceuticals receiving a Series B injection led by Topspin Management Company LBO.
It included participation from Euclidean Capital, InterWest Partners, OrbiMed Advisors and Osage Partners.