You can make huge gains investing in a breakthrough drug, but you can do even better putting your money into a new, cutting-edge technology platform that can fuel a company’s entire pipeline.
One biotech I recommended to my BioScience Millionaire subscribers last July, Sangamo Biosciences Inc. (Nasdaq: SGMO), has developed a technology from naturally occurring molecules, called zinc finger proteins (ZFPs), that scientists can engineer to edit specific genes in the human genome. It can cut them out, replace them, or add new ones – in other words, it plays with the basic building blocks of life as if they were Lego pieces!
Sangamo is currently using ZFP technology to find cures for some of the most intractable – and often un-druggable – diseases we know of, including HIV, Alzheimer’s, Huntington’s, and Down’s syndrome to name a few.
And Sangamo isn’t the only company using ZFPs for research. In fact, it licenses out the technology to scientific institutions and companies all over the world – providing it with a great revenue stream.
As a result, SGMO shares have gone up more than 150% since last summer. Actually, if you’d had the foresight to buy the stock at the beginning of 2012, you’d now be realizing profits of 577% on your money.
The magic word in that sentence is “foresight.” The trick is to spot these technologies early in their development, either before they’ve had IPOs or soon after.
With that in mind, here are a few exciting new technologies to keep an eye on…
Breakthrough No. 1
Amazing Work with Genes
Last year I had the privilege of being the only bioscience writer to attend a privately held international conference in New York City on inflammatory bowel disease. One hundred of the top researchers in the world were there, and one of them, a scientist from Harvard, specifically mentioned ZFPs (see above) as central to his work. He also mentioned a similar gene editing tool called TALENS. But the really exciting one, which he spoke about in passing, is called CRISPR.
CRISPR stands for Clustered Regularly Interspaced Short Palindromic Repeats. I know. Don’t ask. The explanation is as long, complex, and sleep-inducing as you might suspect.
But the short version is this: ZFP and TALENS use proteins to do their gene editing, and proteins are – in the sub-microscopic world – big and unwieldy. It’s very hard to manipulate them to produce the mass quantities of re-sculpted genes you would need to treat some diseases.
CRISPR, on the other hand, uses very small bits of RNA (ribonucleic acid, a chemical present in all living cells) to achieve the same ends, and comparing it to ZFP and TALENS is like comparing a scalpel to a hatchet. It is fast, precise, and can produce edited genes en mass.
Over the past year, CRISPR has been showing up in labs all over the world and has turned into a tech platform for several new biotechs. Sangamo need not worry – ZFPs and TALENS will always have a secure place in research, because CRISPR does have some limitations, but it’s likely to dwarf their success.
Keep your eye on Editas Medicine, founded in 2013 by five world-renowned experts in CRISPR technology. Right now it’s financed with Series A investments, but when the IPO finally happens, get in early.
Breakthrough No. 2
It’s Not Your Garden Variety Printing Technology
Suppose you could create a human ear – or any other organ – on demand with a piece of electronic gadgetry. Sound like science fiction? It’s already been done.
Last year at Cornell University, researchers used a 3-D printer to reproduce human ears made of living tissue combined with polymer, and they come ready to implant!
This is great news for people who lose an ear through traumatic amputation (think Van Gogh), of course, but more importantly, it may be a life changer for babies born with a birth defect called microtia – lack of external ears.
But even more promising, one company has used 3-D printers to produce living, functional liver tissue! Imagine the possibilities for hepatitis, cirrhosis, and liver cancer.
The printing process starts with a computer scan of a sample object, which is then reproduced in whatever medium is called for. The size of the printer is about the same as the one sitting under your desk at home.
This is about as exciting as it gets in medicine, and it represents huge potential for investors.
And guess what? The biotech that’s printing out livers is a publicly traded company.
Take a look at Organovo Holdings (Nasdaq: ONVO), which has already gone up 142% in the last year alone.
Breakthrough No. 3
A Step Toward Curing Cancer
Cancer is an amazingly challenging disease. It can grow and spread throughout the body before giving itself away with a single symptom. Because it’s made from subtly mutated normal human tissue, it can evade the immune system undetected, like a wolf in sheep’s clothing. And it can proliferate so prodigiously and in so many places at once that trying to kill all the malignant cells in a cancer patient is like trying to stop a swarm of bees with a baseball bat.
Now, it’s true that through early detection and prevention, we’ve cut the incidence of some tumors significantly. The PAP smear and HPV vaccine, for example, have made a huge impact on reducing cervical cancer deaths. And we’ve achieved some success in curing pediatric malignancies. Children with the most common type of blood cancer, acute lymphoblastic leukemia (ALL), once a death sentence, now enjoy a 90% survival rate.
But for the most intractable adult cancers – lung, pancreatic, liver, bowel, kidney, and brain, as well as melanoma, myeloma, lymphoma, and the various adult leukemias – progress has been slow, frustrating, and frankly, a little depressing.
We need a new approach, something outside the box, a real breakthrough. And in fact, it looks like we have one. It’s called CAR-T (chimeric antigen receptor-T cell) immunotherapy.
In this approach, T-type immune cells are taken from the patient’s blood, genetically modified, and then re-infused into the patient – but now with the power to recognize, target, attach to, and kill malignant cells.
In a recent study of patients with advanced adult B-cell lymphoblastic leukemia – a highly lethal disease – at Memorial Sloan Cancer Center in New York, CAR-T therapy produced complete remission in 9 out of 10 patients.
That’s an incredible result. And of course, there are plans to study the same approach with other types of cancer, both solid and liquid.
When I see companies in the early stage of cancer drug development, I usually run in the other direction, as I’ve explained before. But the evidence for CAR-T efficacy is so strong that, in this case, I would make an exception.
One caveat: Big pharma Novartis AG (NYSE: NVS) and a start-up biotech called Juno Therapeutics (at present privately held) are currently wrangling for the intellectual rights to this technology. When the dust settles, put your money on the winner.
Novartis, of course, is a publicly traded company. Juno is operating on Series A financing, but research into these technologies isn’t cheap, and sooner or later the private pockets will go dry, forcing an IPO.
I’ll continue to keep an eye out for these promising medical breakthroughs, and report back to you on them as I find them…
By ErnieTremblay, Money Morning