Genomics is one of the epicenters of healthcare innovation and that will remain true for years to come. For investors looking to tap into that theme, it pays to examine some of the catalysts that will facilitate long-term upside for genomics equities.
Fortunately, that endeavor doesn’t require a lot of legwork because exchange traded funds such as the ARK Genomic Revolution ETF (ARKG) deliver broad genomics exposure. However, ARKG is all the more relevant in this conversation because it’s an actively managed fund in an ETF category mostly littered with index-based strategies.
Active management is potentially rewarding for genomics investors because innovations emerge rapidly, often carrying with them significant long-term implications. That’s true of cell and gene therapies for neurodegenerative diseases.
“We expect therapies will target the rarest neurodegenerative diseases given the high unmet need, lack of treatment options, and poor understanding of these diseases,” noted Fitch Solutions. “Increasing cell and gene therapy approvals generally and the FDA’s aim to evaluate their safety and efficacy for neurodegenerative diseases will encourage further research and development.”
Developing cell and gene therapies requires significant expertise and is costly with no guarantee of future approvals by regulators. As a result, current and prospective ARKG member firms engaged in these fields may work collaboratively with partners to lower costs and potentially boost success rates.
Potentially adding to the long-term outlook for ARKG on the cell and gene therapies front, is that there is significant, unmet demand for treatments for conditions such as ALS, Huntington’s disease, and Duchenne muscular dystrophy.
“There are limited effective treatment options available for patients suffering from rare neurodegenerative diseases such as ALS, Huntington’s disease, and Duchenne muscular dystrophy. We, therefore, anticipate that rare neurodegenerative diseases will be at the forefront of research and development in the CNS gene and cell therapy space,” added Fitch.
Another point that could work in ARKG’s favor is that cell and gene therapies are increasingly a point of emphasis for the Food & Drug Administration (FDA). Roughly half the approved therapies in these fields arrived in 2019, indicating there’s ample room for growth on the regulatory front.
“The FDA’s five-year plan for rare neurodegenerative diseases, released in June 2022, outlines a safety project that it will conduct over FY23 and FY24 to gather information for cell and gene therapies to help inform the design of clinical trials for ALS and other neurodegenerative diseases,” concluded Fitch.
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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.