Cancer Detection Meets Portfolio Perfection: The ARKG ETF

Early cancer detection is an emerging frontier for healthcare companies. The ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG) is among the exchange traded funds best positioned to capitalize on that trend.

ARKG includes companies that merge healthcare with technology to capitalize on the revolution in genomic sequencing. These companies try to better understand how biological information is collected, processed, and applied by reducing guesswork and enhancing precision, restructuring health care, agriculture, and pharmaceuticals in the process.

“The Federal Drug Administration (FDA) recently granted Bluestar Genomics, a private company, a Breakthrough Device Designation for its liquid biopsy-based pancreatic cancer screening test,” writes ARK analyst Simon Barnett. “Stanford University researchers focusing on precision epigenomics founded Bluestar Genomics. Unlike those from GRAIL and Exact Sciences (EXAS), Bluestar’s tests focus on a biomarker called 5-hydroxymethylcytosine or 5hmC. 5hmC signals an epigenetic change in the genome that could inform oncologists to the presence of cancer.”

Detecting Opportunity in ‘ARKG’

Cancer screening is among the many rapidly evolving genomics frontiers that ARKG provides exposure to. There’s massive profit potential in cancer screening, but there’s a far more important element to the equation: it’s a matter of life and death. Research shows that many forms of cancer are treatable if detected in early stages.

“Interestingly, 5mC and the rarer 5hmC are related. Like other biochemical processes, DNA methylation (and de-methylation) involves a series of steps,” notes Barnett. “As shown here, 5hmC is an intermediate reaction in a cyclical process. Bluestar’s researchers note that, unlike other reaction intermediaries like 5-fC, 5hmC is more stable in the body. While 5mC seems to repress gene expression, many researchers believe that 5hmC enhances gene expression.”

See also: Liquid Biopsies? ARKG’s Healthcare Thesis

ARKG’s primary focus is to seek long-term growth of capital via active management. The fund invests primarily in domestic and foreign equity securities of companies across multiple sectors, including healthcare, information technology, materials, energy, and consumer discretionary.

Adding to the case for ARKG is that, like other areas of genomics, cancer screening costs are declining. That’s to the benefit of patients and investors.

“In our view, the clustering of 5hmC in functional genomic regions could accelerate the training of machine learning models,” concludes Barnett. “That said, we still have much to learn about this biomarker’s role in disease progression. Sequencing 5hmC, for example, is difficult. A few companies own most of the intellectual property enabling next generation sequencers to read 5hmC.”

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.