There are multiple exchange traded funds addressing the lucrative genomics segment, but the real star of the group is the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG).
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; and enhancing our quality of life.
“Chemotherapy treatments attempt to kill the cancerous cells but has severe side effects and is not guaranteed to succeed. Radical surgery to remove malignant tumors is highly invasive and not possible for certain population segments,” writes Dean Young for Seeking Alpha. “In contrast, gene based living therapies are one-time administrated therapies that can significantly extend life-years of patients, making the value of the therapy extremely high relative to existing treatments.”
ARKG’s Thesis: For the Present and the Future
The actively managed ARKG offers investors a thematic multi-capitalization exposure to innovative elements that cover advancements in gene therapy bio-informatics, bio-inspired computing, molecular medicine, and pharmaceutical innovations.
Pivotal to the long-term ARKG thesis is the CRISPR market.
“CRISPR’s addressable market in the monogenic disease space could scale to $75B annually with nearly $2T in latent demand from unaddressed populations. In the oncology space, living therapies could be used in an addressable market of over $200B. Early detection of diseases via DNA sequencing could have a market in the tens of billions,” notes Seeking Alpha.
Looking ahead, CRISPR-based innovations to accelerate given the technology’s ease of use, cost-efficacy, 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.
Moreover, there’s a significant overall runway for growth for ARKG components going forward.
“The genomic revolution hasn’t even been fully realized yet and many healthcare applications not even yet been discovered. The U.S. is projected to spend over $4T on healthcare in 2020. As a percent of GDP, healthcare spending is projected to continue to grow to nearly one-fifth of GDP by 2030. The genomic revolution has a huge market opportunity to capture,” notes Seeking Alpha.
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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.