WHAT WILL BE THE NEXT FAANG?
Why the next set of FAANG could be in the genomics industry
Cathie Wood of ARK Invest believes that gene editing stocks may play a role in the next set of FAANG stocks and I agree with her. The gene-editing industry is still relatively young and I think over the next few years, we will see a tremendous amount of capital flow into companies that use the gene-editing technology.
What is Gene Editing?
Gene editing is a method that lets scientists change the DNA of many organisms, including plants, bacteria, and animals. Editing DNA can lead to changes in physical traits, like eye color, and disease risk.
Basically, it has the power to get rid of almost any kind of disease, from different kinds of cancer, cystic fibrosis, heart disease, diabetes, AIDS, and more.
How does Gene Editing Work?
The image below shows the basics of how it works. But before all of this, the human genome needs to be sequenced in order to identify the DNA sequence that is causing the disease.
There are a total of 3 types of gene editing technologies:
1) CRISPR-CAS9
2) ZFNs (Zinc-finger nucleases)
3) TALENs (transcription activator-like effector nucleases)
CRISPR is the best method when carrying out gene editing because it is faster, cheaper, more accurate, and more efficient than other existing genome editing methods. The CRSPR technique was actually adapted from a naturally occurring genome editing system in bacteria.
To get an idea of how much cheaper CRSPR is, in an interview about the Genomics Revolution she did with Real Vision Finance, she compared CRSPR with ZFNs cost. What we’re seeing from DNA sequencing is seeing costs fall 30-40% per year due to advancements in technology. The first human genome that was sequenced cost nearly $3 billion dollars and took 13 years of computing power.
Now? We’re down to less than $1000 per human genome and only takes a day or so. Her prediction is that it will cost $100 in 2021 and will even become a part of our annual physical. Zinc Fingered Nuclease (ZFN), mentioned above costs $5500 per base pair of DNA that’s edited. CRSPR on the other hand only costs $30. This is disruption at its finest. It’s like a molecular Swiss army knife that can reprogram the mutations in our DNA.
1 in 5 humans may carry disease-related genetics and this technology will help us identify where our genes have mutated and why we have certain kinds of diseases.
GENE EDITINGS POTENTIAL
Currently, only 5% of monogenetic diseases (diseases caused by one gene) are treatable. But with Gene Editing, all can be treated.
But going out even further, monogenetic diseases make up only 2% of ALL genetic diseases.
So how big of an opportunity is solving monogenic diseases?
$2 Trillion.
So can you imagine how big the monogenetic + polygenetic opportunity will be?
Let’s just say for example, 2% = $2 trillion. So 98% would be?
$100 trillion industry.
This is the technology that will make humankind almost immortal…
So, if you’re interested in learning more about how you can invest in what may potentially be the greatest investment opportunity of our generation, I would encourage you to visit ARKs website and look at their Genomics ETF: ARKG.
Here, they show what stocks are in the ARKG portfolio and lists the fund’s description and objective.
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