Research scientists from MIT and Harvard recently announced they have developed a more precise gene editing technique, which they call “prime editing,” that they estimate could help correct nearly 90% of genetic diseases.
Genetic therapies that could cure chronic diseases with a single treatment will revolutionize healthcare, improving patient outcomes while reducing or even eliminating much of the ongoing cost of managing these patients. The existing biopharma industry will face major disruption.
But while this blue-sky scenario for gene therapy companies is not yet a reality, genetic therapies appear to be at a crucial inflection point. After years of investment and a number of false starts, a new generation of gene and cell therapies is now gaining regulatory approval to treat certain rare diseases and cancers.
* The four recently approved therapies already have sales equivalent to more than USD 1bn on an annualized basis. We expect new approvals, more clarity on the duration of treatment, and more favorable reimbursement terms to spur sales growth and support the theme. The initial market opportunity based on approved treatments and the current late stage pipeline exceeds USD 20bn.
* Our estimate of the initial market potential translates into just 2% of global biopharma sales. We see the chance for a marked capital appreciation of the theme should clinical trials and commercial rollouts meet our expectations.
* We anticipate pharma and biotech companies will take genetic therapies increasingly seriously, both as new opportunities and as potential competitive threats. More acquisitions of genetic therapy companies are likely.
Genetic therapies represent a paradigm shift in medicine that can revolutionize healthcare delivery. In our view, genetic therapy can be considered a sustainable investing (SI) topic. It aligns with the United Nations' Sustainable Development Goal 3—good health and well-being—due to its aim to cure diseases by addressing their underlying cause rather than reactively treating symptoms. As ever in drug development, not all companies will succeed and idiosyncratic risk is high. We recommend investing in the genetic therapies theme through a diversified portfolio of companies exposed to it to manage the risks associated with clinical failure.
Read more in our new report, “Genetic therapies,” part of our Longer Term Investments series.