How to Invest in Precision Medicine
How to Invest in Precision Medicine
Investing in Precision Medicine
Precision medicine has transformed a one-size-fits-all industry into a personalized approach to healthcare that promises to help more people live longer, better, healthier lives—a plus for the investors who invest in precision medicine’s innovative technologies.
What is precision medicine?
Highly personalized and deeply data-driven, precision medicine is an emerging segment of healthcare. GE Healthcare, Illumina, 2bPrecise, and Gemonenon may not be household names like 23andMe, but they and other cutting-edge companies are already changing the face of disease treatment and prevention around the globe.
Often called personalized medicine or individualized medicine, precision medicine takes into account an individual’s genes, environment, and lifestyle. The “precision” in precision medicine allows doctors and researchers to more accurately pinpoint which treatments will be most effective for certain people or groups of people.
People interested in investing in precision medicine look to future growth, while tracking current trends in genetic testing, pharmacogenomic testing, and medical imaging, as well as industries that further the advancement of these innovative approaches. For example, data drives precision medicine, and recent advances in computer science and technology are harnessing data to energize innovation across the healthcare sector.
“Growth” is the key word. Globally, the precision medicine market was valued at more than $514 billion in 2021. The demand for new drugs to combat cancer and other diseases, as well as more collaborations between researchers, governments, and private companies look to expand the market at a compound annual growth rate of nearly 7 percent from 2022 to 2030.
There are significant challenges that need to be addressed before precision medicine can have a global, transformative impact, but leaders throughout healthcare and government are increasingly recognizing precision medicine’s enormous potential to deliver better care faster.
Three fields that are rapidly driving innovation in precision medicine are genetic testing, pharmacogenomic testing, and medical imaging. Genetic testing identifies changes in chromosomes, genes, or proteins. The results confirm a genetic condition or rule it out, or even determine someone’s chance of developing or passing on the genetic disorder. Genetic testing is currently used to identify people who are at particular risk for certain types of cancer (such as with the BRCA gene test for breast cancer), and the hope is that in the future, genetic testing will expand into the realm of primary care as a noninvasive screening test for preventive medicine.
Pharmacogenomic testing is a type of genetic test used to figure out how a patient will respond to certain medications. Our genetic makeup contributes to how we respond to medicine, so pharmacogenomic tests look for clues in our genes to figure out which medications, or what doses of those medications, are likely to work best. For example, some people have an enzyme deficiency that makes drugs called thiopurines ineffective. A pharmacogenomic test for this enzyme deficiency lets the doctor know whether thiopurines are a good course of treatment for autoimmune disorders, certain types of cancer, and organ transplants before treatment begins, rather than adjusting course after complications arise.
Medical imaging encompasses the various technologies that allow us to view the human body in order to diagnose, monitor, or treat medical conditions (MRIs, CT scans, etc.). Innovative technological solutions are changing how images are gathered and interpreted. By harnessing the power of artificial intelligence and deep learning, Intel developed technology that was able to identify thyroid nodules in patients with 10 percent higher accuracy than radiologists could. Innovations in genetic testing, pharmacogenomic testing, and medical imaging are accelerating the expansion of precision medicine in the healthcare ecosystem—and providing opportunities for investors.
Why invest in precision medicine?
The COVID-19 pandemic fueled innovation at every level of healthcare. People turned to telemedicine for doctor’s appointments. Genetically engineered messenger RNA (mRNA) was used in COVID-19 vaccines. The state-of-the-art CRISPR gene editing tool was utilized to help doctors diagnose COVID—and with the backing of government initiatives, facilitate the testing that allowed communities to return to life.
Investors interested in precision medicine pay attention to government initiatives that are funding innovation, trends in genetic testing, the importance of data—and the infrastructure needed to manage and protect it—and even healthcare prices.
Leaders in government are recognizing the enormous potential of precision medicine and are committing substantial resources to support innovation. In 2015, President Obama launched the Precision Medicine Initiative (PMI) with $215 million in funding to drive research and expand precision medicine across the U.S. healthcare ecosystem. A cornerstone of the PMI is the groundbreaking All of Us Research Program, which is now following a diverse group of at least 1 million people in the U.S. in order to accelerate medical research and improve health.
The proliferation of direct-to-consumer genetic testing is another driver of precision medicine’s long-term strength. Companies such as 23andMe and Ancestry.com offer genetic testing that provides customers with genealogy and health insights. Millions of people have taken these at-home genetic tests, and testing companies now sit on mountains of valuable data. That data, when properly (and legally) harnessed, is enormously valuable in developing new drugs.
While precision medicine is clearly going to continue changing the healthcare landscape in the coming years, there are a few challenges that need to be addressed before it becomes a game changer for everyone.
The first challenge is data. Between 2013 and 2020, an estimated 2,214 exabytes of healthcare data was produced, a staggering 48 percent annual growth rate. Cloud platforms help companies manage the sheer volume of information, but health data is not like other data—it is subject to extensive and strict government regulations (HIPAA in the U.S., for instance). Companies that learn to navigate these complicated data issues as they work to integrate precision medicine solutions will likely move to the forefront of the markets.
The next challenge is access. If you are poor or uninsured, precision medicine, as it currently stands, is likely too expensive for you to use. In a growth market like precision medicine, investors keep an eye on innovation—as it accelerates, prices come down—and government initiatives that improve access for everyone.
These are challenges that thought leaders in healthcare, private industry, and government are thinking about, and they are worth considering if you are interested in investing in precision medicine.
How to invest in precision medicine
Investing in a field as new and innovative as precision medicine comes with its share of risk. As an emerging segment of healthcare, precision medicine is still growing and the companies in this sector are still working out where that can make the biggest impact. Investing in precision medicine via an ETF or mutual fund is a good way to access this emerging field without taking on undue risk. Here are a few searches to help you get started:
References:
- “Personalized Medicine Market Size, Share & Trends Analysis Report By Product (Personalized Nutrition & Wellness, Personalized Medicine Therapeutics), By Region, And Segment Forecasts, 2022 - 2030,” accessed December 6, 2022, Grand View Research, link.
- “Powering Precision Medicine with Artificial Intelligence,” December 20, 2019, Intel.com, link.
- Aptekar, Jacob, and Nicholas Donoghoe, Edd Fleming, Meredith Reichert, Erika Stanzl, and Kevin Webster, Precision Medicine: Opening the aperture, February 6, 2019, link.