The ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG) is in rare air among healthcare exchange trade funds this year, having nearly doubled. Robust exposure to new and exciting therapies is one obvious catalyst for ARKG’s success.
ARKG includes companies that merge healthcare with technology and 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, pharmaceuticals and enhancing our quality of life.
“The outlook for ARKG is bright because the fund, though focused, addresses exciting, high-growth healthcare markets such as CRISPR, precision medicine and targeted therapeutics,” according to InvestorPlace.
Genomics companies try to better understand how biological information is collected, processed and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals and enhancing our quality of life. Data confirm that genomics is a booming market with epic potential for investors.
A Powerful Outlook for ARKG
“ARK Invest estimates that by 2024 therapeutic pipelines and tool providers should generate hundreds of billions of dollars in new revenue and trillions in new market capitalizations as they transition to the genomic age,” according to the issuer.
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.
“Assuming targeted therapies can reduce drug trial failure rates by a mere 10% and cut trial times by 25%, returns for related companies could triple, ARK notes. That implies massive, long-term upside potential for ARKG,” reports InvestorPlace.
Looking ahead, CRISPR-based innovations are expected 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.
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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.