Don’t Miss the Next Biotech Frontier

We are blessed to live in the modern world. For sure, there are problems today that past generations didn’t have to deal with. However, the world has never been perfect. By and large, living standards today are better than ever.

One area where we have made undeniably tremendous progress is in medicine. For many centuries, plant-based medicine is all people had. Some plants do have healing properties, but for serious ailments, herbal medicines just don’t cut it.

From Herbs to Chemicals

Advances in chemistry, lab techniques, and equipment starting in the 19th century enabled the development of chemical-based drugs. The earliest record of a synthetic medicine that I could find was a drug called chloral hydrate, a chemical compound with sedative and hypnotic properties first discovered in 1832. You won’t be able get a prescription for it nowadays in the U.S. or Europe, but back in its heyday use was widespread, including as a recreational drug.

For more than a century, these chemical-based drugs were the frontier of pharmaceutical discovery. The development of drugs gave rise to the pharmaceutical industry, with many companies growing to enormous sizes today.

Then in the 1980s, a new class of drugs broke through. These are biologic drugs, produced from living organisms or containing components of living organisms. They are also called “large molecules” because they are typically complex protein molecules. Over the last 40 years or so, many life-changing biologic drugs have achieved commercial success. The best-selling drugs generate billions of dollars of sales a year, so there’s clearly incentive for pharmaceutical companies to keep trying to develop the next big thing. For investors, betting on the right drug developer can result in big-time gains.

There used to be a clear distinction between traditional pharmaceutical companies and biopharma companies. The former developed chemically-based drugs, and the latter biologics. But over time, the line between traditional and biopharma has blurred. In pursuit of growth and new products to replace the loss of patents in older ones, traditional big pharma has expanded into biologic drugs. Indeed, today most therapeutic breakthroughs are happening in biopharma.

Progress doesn’t stop though. The next frontier for medical breakthrough appears to be gene therapy. Instead of developing a drug to treat a disease, gene therapy tries to treat or prevent diseases by fixing the faulty DNA that causes a disease in the first place! This is done by inserting, replacing, or deactivating genes to change a patient’s DNA. Instead of repeated dosing, one treatment could be enough.

Read This Story: Dollars From DNA

The concept may sound straight forward, but execution is very difficult and the field has been littered with failures for decades. However, thanks to technological advances in recent years, gene therapy has become a practical reality. Currently, research is generally focused on the central nervous system, blood and the eye. Not only are the potential medical benefits limitless, gene therapy figures to be lucrative for the developers. Each treatment commands six figures, and some will probably be over $1 million. The opportunity is vast.

A Handful Approved So Far

The first gene therapy to win approval from the U.S. Food and Drug Administration (FDA) was a product made by Novartis (NYSE: NVS) called Kymriah. Approved in 2017, Kymriah treats B-cell acute lymphoblastic leukemia.

Normally, a body’s T cells recognize certain antigens on diseased cells and attack them. However, T cells cannot tell cancerous B cells apart from normal B cells. To get around this problem, T cells are removed from the patient and genetically modified to make them sensitive to a specific antigen on B cells. Then the T cells are re-injected into the patient to kill B cells, including the cancerous cells. This form of therapy is called CAR T-cell therapy.

Spark Therapeutics’ Luxturna was the first in vivo (taking place inside the patient’s body) gene therapy to win FDA approval. Sparks is a subsidiary of Roche Holding (OTC: RHHBY). Luxturna treats a rare and serious eye condition caused by the mutation in a gene responsible for making a critical protein for vision.

Under this treatment, a normal copy of the gene is carried by a vector (in this case, a modified virus) and injected once into the patient’s eyes. The virus injects its genetic material into the human cells, and as the cells replicate the new cells will have the normal gene. Luxturna isn’t a complete cure, but it significantly improves the patients’ ability to see.

As of this writing, there are fewer than 10 FDA-approved gene therapies on the market, but count on seeing more and more approvals. Since the therapy is new, long-term effects are yet unknown, but the mere fact that gene replacement works is a reason for excitement.

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