ETF Trends CEO Tom Lydon discussed the ARK Genomic Revolution Multi-Sector Fund (ARKG) on this week’s “ETF of the Week” podcast with Chuck Jaffe on the MoneyLife Show.
The ARK Genomic Revolution ETF (ARKG) is an actively-managed fund from the team at ARK Invest that tries to pick the companies best positioned to profit from advancements in energy, automation, manufacturing, materials, and transportation.
ARKG is an outperforming biotech ETF. As far as 1-month performances: ARKG is +43.7% versus the benchmark Nasdaq Biotechnology Index at +26.4%. Year-to-date, ARKG is +15.7% versus Nasdaq Biotechnology Index at +2.4%.
Concerning today, there is short-term support from the hope of a viable COVID-19 drug. For example, Pluristem (PSTI) surged on news that it had treated seven severely ill patients with COVID-19 in Israel with its allogeneic placental expanded (PLX) cells, with a survival rate of 100%, and It has treated at least one patient in the United States as well.
Not Just a Short-Term Coronavirus Story
ARKG capitalizes on innovative, specialized drugs that are being developed by many overlooked names. Iovance (IOVA) climbed after it announced it would present data on its Phase 1 Study Combining Tumor-Infiltrating Lymphocytes (TIL) and Nivolumab in Non-Small Cell Lung Cancer. Compugen (CGEN) jumped on news that the company will present potentially positive updates on its ongoing Phase 1 immuno-oncology clinical trial evaluating COM701.
Looking at the long-term outlook, ARKG includes companies that merge healthcare with technology and capitalize on the revolution in genomic sequencing. These companies try to understand better how biological information is collected, processed, and applied by reducing guesswork and enhancing precision, restructuring health care, agriculture, pharmaceuticals, and improving our quality of life.
The convergence of Artificial Intelligence (AI), Next Generation DNA Sequencing (NGS) and CRISPR gene-editing has the potential to boost the efficiency of drug development radically. Breakthroughs in genomic science can present new treatments to help patients recover from what were once believed to be incurable afflictions.
For the record, the global genomics market was worth $851.96 million in 2019. It is expected to grow at a compound annual growth rate (CAGR) of 14.71% and reach $1.5 billion by 2023. Rising government funds for research on genomics drives the growth of the single-cell genomics market. The government funding focuses on efforts to resolve the complexity of the human genome, the genomic basis of human health and disease, and ensure that genomics is used safely to enhance patient care and benefit society through government, public and private institutions.
Scientists have identified more than 50,000 genetic diseases caused by single-gene mutations, many of which are likely to be treated through genomic approaches, including several methods that have already begun to receive FDA approval. Looking ahead, CRISPR-based innovations to accelerate given the technology’s ease of use, cost-efficacy, a growing body of research surrounding its safety and AI-powered CRISPR nuclease selection tools. CRISPR could also be utilized to address some of the most prominent healthcare problems, which opens up a significant investment opportunity in monogenic diseases.
Bolstering the case for ARKG over the long-term is the importance of genomics in an array of clinical trials. Drug development companies are making clinical trials more efficient by using NGS to find and enroll patients likely to respond. Half of the clinical trials and 80% of oncology trials now collect genetic information. ARK believes that clinical trials using genetic diagnostics will result in fewer failed drugs and will increase capital efficiency.
Listen to the full podcast episode on ARKG ETF:
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