Innovation in healthcare can help people and also provide returns on investment

Genetic sequencing information can help both diagnose and treat diseases

By Laura Don

The human body is an amazing machine. At the heart of this is our genetic code, with genes forming the basic building blocks of life.

Different genes determine different traits

of an organism and enable human cells to function and help control how the body grows and operates.

Likewise, changes or mutations to these genes, whether inherited or not, can be the cause of a large number of diseases. Therefore, it is helpful for researchers to understand as much as possible as soon as possible.

Imagine a world where you or a loved one can be screened for multiple types of cancer, using genetic traces from a single drop of blood, at an early stage when it’s most likely to be cured. This groundbreaking technology may not be far off.

In Liontrust’s Sustainable Investment team, we believe the topic of healthcare innovation provides an important lens for identifying market-leading healthcare companies.

We look for companies with unique intellectual property that delivers positive patient outcomes along with strong returns for investors.

Innovation in gene sequencing expands our understanding of the human genome while reducing costs. US-listed large-cap Illumina,

a first mover in the market and one of our holdings, drove this one. It is a company with heavy investment in R&D and

a single wallet.

The international scientific research project Human Genome Project was able to sequence our genetic code at a total cost of $3 billion in 2003 after a 13-year effort. Thanks to continuous innovation, this figure has drastically decreased over time. Illumina recently unveiled new technology designed to reduce the cost of sequencing a genome to $200.

This is a remarkable change, achieved by reading genes en masse with a large batch

systems, which require samples to be processed in well-resourced centralized laboratories.

However, the future will be much more flexible than this.

Another of our holdings, UK-based Oxford Nanopore, has pioneered portable devices that can sequence genes cost-effectively and without the need to travel. This holds incredible promise, with business growth expected to be in the order of 30% annually.

This not only has a positive impact in terms of sequencing speed, but also increases access to isolated areas or emerging markets where large-scale laboratories are difficult to find.

For example, Nanopore’s devices have mapped genes underwater, in a remote Ecuadorian rainforest, and even on the International Space Station.

The point of all this information about genetic sequencing, and its relevance to all of us, is that it can help diagnose and treat disease.

Looking first at the diagnosis, if we know the genetic markers of a disease or pathogen, we

may have more confidence in what the patient is facing. It follows that if we can reach this diagnosis earlier in the progress of the disease,

we can aspire to much better patient outcomes.

Consider the example of the liquid biopsy. Here we look for genetic traces of early cancer in the blood, with the aim of detecting the disease much earlier than the conventional paradigm of waiting for the tumor to grow large enough to be seen with a CT scanner. Grail, an Illumina-owned company, is one of our exposures to this nascent industry.

In terms of treatment, therapies are increasingly targeting genetic subsets of individuals within a given disease. The strongest example of this is when the patient is given a corrected version of the gene to cure the disease at its source.

Oxford Biomedica and Syncona are examples of companies exposed to this paradigm.

There is tremendous growth opportunity within this space that benefits both humanity and investors. Remember that only 0.05% of humans have had their genome sequenced. Innovating in healthcare through our Liontrust Sustainable Future investment process allows us to see that these are the early days of opportunity for humanity, science and business to enable this progress.

Laurie Don is an investment manager in Liontrust’s sustainable investing team.

Leave a Reply

Your email address will not be published. Required fields are marked *