When it comes to the next generation of healthcare, genomics is one industry that’s engineering seismic shifts in the usually placid sector and the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG) is one of the ETFs driving that change.
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.
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.
“Next-generation DNA sequencing (“NGS”) is the driving force behind the genomic revolution. Since 2003 the cost to sequence a human genome has dropped from nearly $3 billion to less than $1,000,” said ARK Invest in a recent note.
Big DNA Growth Ahead
The DNA sequencing market is experiencing significant growth, with estimates expecting the market to grow from $6.2 billion in 2017 to $25.5 billion by 2025 – representing a compound annual growth rate of 19%.i As a result of significant technological advances in the field, it’s estimated that anyone with $100 can now sequence their DNA, down from the $100 million it was estimated to cost in 2001.
Central to the ARKG thesis are declining genomics costs.
“ARK believes that NGS costs are declining at a rapid rate, following Wright’s Law: for every cumulative doubling in units produced, costs decline 400%,” according to AKR. “If NGS had followed Moore’s Law since 2009, the cost to sequence a whole human genome today would be $100,000—more than two orders of magnitude higher than the $1,000 that Wright’s Law predicted.”
Genomics companies spend a plethora of time and massive amounts of money to fund breakthrough biological treatments and diagnostic tools. Blossoming developments can literally change their fortunes, and the fortunes of shareholders overnight. Genomics is likely to be an integral part of the biotechnology growth story in the years ahead.
“ARK believes that the number of whole human genomes sequenced per year should scale 110% at an annual rate, from roughly 2.6 million in 2019 to 105 million in 2024, thanks to the clinical adoption of molecular diagnostics. Among these sequencing-intensive tests are liquid biopsies, solid tumor profiling, germline testing, immune-oncology, and non-invasive prenatal screening,” according to the issuer.
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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.