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.
This was worth some $30m (€32.2m) more than the month’s second-largest transaction, a $44m (€47.3m) funding round for Florida-based F1 Oncology.
Precision predictions & biotech investing
In a report published on 18 January 2017 on what it calls precision medicine, business consultancy Frost & Sullivan made a series of detailed predictions.
By 2025, companion diagnostic and targeted therapeutics will go beyond oncology and spread toward therapeutic areas such as infectious diseases, CNS (central nervous system) and cardiovascular diseases, it says.
Predictive biomarkers for various diseases will be a sensational area for future investment and growth.
Over the next five to eight years, clinical sequencing technologies and service will represent the largest growth potential.
Other emerging technologies – liquid biopsy and point-of-care testing technologies – will start to compete against established NGS (next generation DNA sequencing) space for precision diagnostics.
Large-scale population sequencing initiatives globally will be the key growth drivers for NGS informatics.
Also, large players with end-to-end capabilities will make NGS-as-a-service a dominant business model. This will make genomic data actionable in precision medicine practice (genomics is a term that describes the study of all parts of an organism’s genes).
As molecular imaging gets quantitative, the co-development of imaging diagnostics and therapeutic agents will help design more efficient drug development workflows.
Radiomics holds significant untapped potential to move the radiology field forward in the direction of personalised medicine.
Biobank network or hub-based models providing online access to high-quality samples and images globally with advanced data management and informatics solutions will be the main differentiator for the success of both commercial and public biobanks.
Remote patient monitoring (RPM) solutions that are clinically relevant with privacy and security robustness will be a key differentiator for precision medicine practice.
Innovative online patient engagement platforms capable of capturing tailored information on lifestyle and behavioural-based health risks data could provide patient risk classification solutions to make precision medicine a holistic approach.
In the next two to three years, molecular decision support systems will start bridging the last mile for genomics data into clinical workflows.
By 2020 advanced clinical decision support software will evolve to provide combined insight from genomic data with clinical and environmental information. This will facilitate targeted diagnostics for personalised treatment decisions.
If you might think this all sounds more Frankensteinian than ultra-Utopian, and ultimately unpalatable, there’s no need to panic. Remember that Simon Kuper used the word 'rich' as shorthand for those who will benefit.
The vast bulk of the human population will likely never see their 100th birthday, let alone live forever.
And the good political folk of the Netherlands are working on the alternative. Kuper notes that the Dutch pioneered gay marriage and the legalisation of marijuana consumption.
They are now arguing about a new law on 'completed life', which would allow healthy oldies to be the subjects of euthanasia.
Vision for euthanasia
Once the outrageous financial expense of the personalised medicine made possible by continuing developments in biotechnology becomes clear, expect the clamour for legal euthanasia to grow.
That would present new business growth opportunities for the likes of Dignity, currently the UK's only listed funeral director.
12 essential words in the biotech sector
- DNA: deoxyribonucleic acid, the hereditary material in humans and almost all other organisms. Most DNA is located in the cell nucleus (where it is called nuclear DNA). A small amount can also be found in the mitochondria (where it is called mitochondrial DNA or mtDNA)
- RNA: ribonucleic acid, an important molecule with long chains of nucleotides. A nucleotide contains a nitrogenous base, a ribose sugar, and a phosphate. Like DNA, RNA is vital for living beings
- Genetics: scientific study of the effects that genes – units of heredity – have on an individual
- Genomics: study of the full genetic complement of an organism (the genome)
- Epigenetics: study of changes in cells/organisms caused by the modification of gene expression, thus adjusting activities of the right genes and helping to adopt the body to external and environmental factors
- Remote patient monitoring: technology to enable monitoring of patients outside conventional clinical settings
- Biobank: repository for the store of biological samples
- Biobank network: network of biobanks
- Radiomics: a field of medical study that aims to extract large amounts of quantitative features from medical images using data characterisation algorithms
- Next generation DNA sequencing: next-generation sequencing (NGS), also known as high-throughput sequencing, is the catch-all term used to describe a number of different modern sequencing technologies. These recent technologies allow DNA and RNA to be sequenced much more quickly and cheaply than the previously used Sanger sequencing. They are seen as having revolutionised the study of genomics and molecular biology. They include:
- Illumina (Solexa) sequencing
- Roche 454 sequencing
- Ion torrent: Proton / PGM sequencing
- SOLiD sequencing
- Biomarker: biomarker, or biological marker, is a measurable indicator of a biological state or condition
- Liquid biopsy: A test done on a sample of blood to look for cancer cells from a tumour that are circulating in the blood or for pieces of DNA from tumour cells that are in the blood. A liquid biopsy may be used to help find cancer at an early stage