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Action packed day with Wimbledon, Euro 2020 & Richard Branson joining the 60 mile high club…
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What if I told you that you could have Tom Brady’s touch-down throwing arm and (or) Gisele Bündchen’s supermodel legs… WITHOUT being one of their children?
Welcome to the world of gene editing.
Recently, there was a massive breakthrough at the forefront of gene-editing technology that sent quite a few related stocks up 20-65% (and put us one step closer to designer babies).
Superstar fund manager Cathie Woods has also pointed to this area as the next forefront of FANG-calibre names.
“We actually think the next FANG stocks are in the genomic age … The biggest upside surprises are going to come from the genomic space, and that’s because the convergence of DNA sequencing, artificial intelligence, and gene therapies are going to cure disease”
But what is this technology all about, what does the market look like, and how far is too far?
This week, in <5 minutes, we’ll cover gene editing:
Gene Editing 👉 A brief history, B.C. “Before CRISPR”
CRISPR 👉 Innovative technology
The Recent Breakthrough 👉 Intellia therapeutics
CRISPR players in the space 👉 Who is doing what
How GRIT’s Playing it 👉 My horse in the race
Let’s get started!
1. Gene Editing 👉 A Brief History, B.C. “Before CRISPR”
In the scientific community, a breakthrough is commonly the aggregate work of many brilliant minds working on a piece of the puzzle that comes together in the end.
The term “standing on the shoulder of giants” comes to mind.
Certain iterations of gene editing have been around since the discovery of the double helix in 1953 by James Watson and Francis Crick. This was one of the most significant discoveries that defined genetics as we know it today.
For the complete history of DNA which I found was a really cool timing ladder, you can read more here.
But we’re going to fast forward to 1972 to the creation of recombinant DNA (rDNA). rDNA had been created through the combination of elements of DNA from different organisms.
“By introducing genetic material from one organism to another, this discovery established the principles of modern genetics, and was the basis of many future experiments”
In theory, rDNA made it possible to take a virus like HIV, delete the harmful genes, and splice in a healthy gene [delete: for] to a human cell. You could then release copies of this recombinant (improved) virus in the cells of a patient with the diseased copy of this gene.
The virus would then naturally insert the new gene into the cells’ DNA, where it could compensate for the harmful diseased twin gene and alleviate the disease’s symptoms.
Kind of like how you can touch up pictures on Photoshop to remove redeyes. Except instead of pictures it’s humans, and instead of removing redeyes, it’s saving lives.
This is the basis for GENE THERAPY – turbocharging cells with healthy genes to make up for sick ones.
The 1990s were mostly a period of discovery in which the Human Genome Project succeeded in mapping the human genome with more than 20 thousand genes identified and documented.
This was very important because this global coordination effort essentially turned the Human Genome into data.
What’s exciting is how incredibly cheap the technology is becoming:
“Completed in 2003, the Human Genome Project was the first systematic attempt at decoding the whole human genome. The Project cost roughly $2.7 billion and took over a decade. Fewer than two decades later, the cost to sequence a human genome has dropped to less than $6009 and, according to ARK Invest’s research, should drop to less than $100 in the next five years.” – Ark Investments
DNA sequencing could become so cheap it becomes part of our annual physical!
When you reduce the amounts of unknowns in an equation and increase your sample size, you can make more accurate assessments and improvements. The increased mapping of the genome helped us understand what else is out there.
Although the early principles of CRISPR were discovered in 1993, it wasn’t until 2012 that Jennifer Doudna & Emmanuelle Charpentier pioneered the technology.
UNDER THE RADAR…
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Where is the best place to produce gold? The place it’s already happened! Omai Gold Mines produced MILLIONS of ounces while the gold price was less than US$350/oz. I wonder what happens when the gold price is +$1778/oz ; )
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2. CRISPR 👉 Breakthrough Technology
CRISPR technology has been generating a lot of buzz recently and stands for Clustered Regularly Interspaced Short Palindromic Repeats.
Simply put – CRISPR is a technology that can be used to edit genes. The idea behind it is to find a specific bit of DNA inside a cell, then usually to ALTER that piece of DNA.
Think: a cheat code for human DNA.
Alternatively, CRISPR has also been adapted to do other things such as turning genes on or off without altering their sequence.
There were ways to edit genomes of plants and animals before this, but it took years and cost hundreds of thousands of dollars. What CRISPR did was make this cheap and easy – a much more viable solution.
In a way, CRISPR has become the Swiss Army Knife of gene modification: it’s versatile and it literally cuts DNA.
Any time you make the input nodes in a data set more accessible and easier to input, the decisions you can make from the overall dataset improve.
Where it gets interesting is the applications of this technology.
The ideal and immediate use for CRISPR technology is to treat diseases by removing harmful components of the DNA strand as the virus is invading.
The DNA that is chopped off by this bacterial adaptive immune system is then “saved” in memory for fighting future infections.
A problem with this method is that it hasn’t been very precise until recently.
Examples of where this technology can be used are cancer treatments, tackling obesity, or even creating hornless cows. But where it becomes controversial is when you start messing with evolution and creating “gene drives” of preferential attributes.
You’ve probably heard about this in the form of “designer babies” which I alluded to above. So, what does that mean exactly?
Want your kid to have a better shot of going pro? Just ensure they’ll grow to be well over 6’0”!
Have dreams of raising the next Unicorn start-up founder? Boost IQ by 20 points to give them an extra edge!
A scary thought, but thankfully, not something we have to worry about quite yet!
3. The Recent Breakthrough 👉 Intellia Therapeutics
On June 26, 2021, Intellia released interim data from a Phase 1 trial of a CRISPR candidate showing the ability to genetically edit cells inside a liver.
CRISPR was previously restricted only to editing cells outside of the body or in the eye.
This time around, researchers injected a CRISPR drug into the blood of people born with transthyretin amyloidosis, a destructive disease that causes fatal nerve and heart disease.
The results showed that the editing technology was able to nearly shut off production of the toxic protein generated by their livers by knocking the gene's activity.
"The allure and the promise of CRISPR is this notion that you can change any gene, anyhow, anywhere in the genome, so long as you can get it there. And that last provision is the key one. This is the first time CRISPR has ever been infused into a patient and the first time we've been able to target a gene successfully." – Intellia CEO, John Leonard.
Below is the one-year performance of Intellia Therapeutics (NTLA-US) as a percentage of comps in the space:
Now, let’s check in with our Outrageous Chartered FinMEME Analyst Dr. Patel and see what he thinks about gene editing?
4. CRISPR players in the space 👉 Who is doing what
Beam Therapeutics (Ticker:BEAM)
Biotech company that is putting together a platform for precision genetic medicines. Beam has proprietary base editing technology, which potentially enables an entirely new class of precision genetic medicines that target a single base in the genome without making a double-stranded break in the DNA. Essentially a different way of going about it.
Editas Medicine (Ticker:EDIT)
Editas is one of a handful of companies that developed CRISPR technology. For now, it concentrates efforts on three major therapeutic areas: Ocular diseases, Sickle (cell disease and beta-thalassemia), and cancer where it continues to develop both autologous and allogeneic engineered cell medicines for the treatment of solid tumors and blood cancers.
Intellia Therapeutics (Ticker:NTLA)
This company finally made the breakthrough I mentioned above. If you want to go with momentum and inertia, buying after the initial pop fades a bit is usually a good strategy. A case in point on this one is Moderna, it has run steadily even after the initial jump.
This company combines deep scientific, technical, and clinical development experience and proprietary innovations in genome editing and delivery technologies.
They have a strong head start on their IP portfolio, which puts them in a position to unlock broad therapeutic applications of the CRISPR technology and create new classes of therapeutic products.
CRISPR Therapeutics (Ticker:CRSP)
This company hit the name and ticker jackpot, and rightfully so. One of their scientific founders is Dr. Emmanuelle Charpentier, who you’ll recognize from above as one of the scientists who discovered this breakthrough. They believe using CRISPR may enable an entirely new class of highly active and potentially curative therapies for patients for whom current biopharmaceutical approaches have had limited success.
5. How GRIT’s Playing it 👉 My horse in the race
For me, biotech is a HUGE “asymmetric bet” for the next decade. BUT, telling the difference between each company can be tough, especially in the Biotech space. Which is why I would recommend leaning on a biotech expert, or going with the most established players in the space.
Biotech stocks are typically binary: hit or miss. But with CRISPR technology, I still believe it is in early stages of development and each of these players has an opportunity to “stand on the shoulders” of their peers as the science is incrementally improved.
The name that I hold in my portfolio is CRISPR, because I like the track record of having one of the breakthrough scientists on the team. Plus they have plenty of cash on hand (~$1.7B) with a burn of $200-300MM/year giving them at least 7-8 years of runway to commercialization.
Wrapping up…
Any time a scientific breakthrough happens you have to pay attention. While I am no expert on the specifics of the technology, I understand very well the implications of the technology.
It makes the human being a treasure trove of data
P.S Approximately 90% of #Bitcoin mining capacity in China is now closed. The price has barely moved. Remember when they said this would destroy Bitcoin? I think they accidentally made it stronger ; )
Until next time. Always Yours. Incessantly Chasing ROI,
-Genevieve Roch-Decter, CFA
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What else we Grittin’ On?
YOLO. How to get rich in the stock market? Join Congress. Check out Nancy Pelosi’s trades. Looks more like a Robinhood HODLer and less like a member of Congress. YOLO indeed, Madame Speaker!
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Sources:
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