Healthcare companies exploring the new frontier of personalised medicine are attracting investors’ interest, says Michael Bull, Investment Director at Quilter Cheviot
Over the past 50 years, we have become used to the idea of mass healthcare. Cold as it may seem, our health system is built on an industrial scale, with everything from heart disease to cancer treated using largely ‘one size fits all’ procedures.
Is the industrial model of healthcare the future though? There are good reasons to think not. Advances in medicine and our understanding of genes are leading us to a new era of personalised medicine, where the treatment we receive will be based on our own genetic make-up.
These advances unlock two exciting areas: first, the ability to cure genetic conditions; and second, medicines individually tailored to cure diseases such as cancer.
Medical scientists are now concentrating their focus in one of two areas – cell therapy and/or gene therapy. Cell therapies are designed to improve the immune system’s ability to fight diseases such as cancer.
They involve collecting cells from a patient’s blood, modifying them so they can make a more vigorous attack on a disease, and re-injecting them into a patient. Many believe treatments like Chimeric Antigen Receptor T Cell (CAR-T) therapy is the future of oncology.
Gene therapy involves the modification of somebody’s genes. A ‘normal’ gene is inserted to replace an ‘abnormal’ gene, potentially curing a genetic disorder entirely. While individual genetic conditions are rare by themselves, together they are quite common, affecting around three million people in the UK alone.
Gene therapy is a one-off treatment, which could potentially cure millions of people and eliminate the struggle of managing a genetic disorder altogether.
While cell and gene therapy technologies are still at an early stage, there has been some success, with the US approving the first cell/gene therapy back in 2017 for a form of blood cancer.
Cell and gene therapy feasibility
Treatments like cell and gene therapy build on almost a century’s worth of science, including that of Francis Crick, James Watson and Frederick Sanger. While Crick and Watson discovered the structure of DNA, Sanger was the first to establish techniques to sequence and map genomes in the 1970s and 1980s.
The work of the Human Genome Project later mapped out the human genome, with the completion of the project in 2003 giving us a greater understanding of what individual genes are responsible for.
It is only now that the science is sufficiently advanced enough – and the technology cost-effective enough – to see treatments based on this work.
In the decade and a half since the Human Genome Project, the cost of sequencing or mapping someone’s genome has fallen dramatically, from around $100m to $1,000. This has made it feasible for healthcare companies to invest in developing the ideas and treatments behind personalised medicine.
Once somebody’s genome has been sequenced, new technologies such as CRISPR (clustered regularly interspaced short palindromic repeats) allow us to edit genes or turn them on or off without altering their sequence. CRISPR is widely used in scientific research today and some people are even eating ‘CRISPRed’ food.
The 100,000 Genomes Project
At the end of 2012, the UK government also set up the 100,000 Genomes Project, which aimed to sequence the whole genome of various NHS patients. The project focused on people affected by a rare disease or cancer, with its database particularly valuable due to its combination of genetic data and patients’ full medical records.
The 100,000 Genomes Project has already yielded results. The first family with a genetic abnormality – causing kidney failure – was diagnosed in 2015 and changes then made to their treatment.
The 100,000 Genomes Project is also being used to develop areas such as precision oncology. Genomics England, for example, is partnering with certain companies to combine genomic data on a patient’s cancer tumour with the drug response of that tumour, potentially making treatment far more effective.
Personalised medicine today
The widespread adoption of new treatments based on cell and gene therapy is still some way away. However, some treatments are coming through. Novartis, a Swiss drug maker, now offers a form of CAR-T for leukaemia in children. The company has one of the most comprehensive CAR-T development programmes, with 13 advanced platform therapies in clinical development and nine expected to enter the clinic in 2019.
The opportunities around personalised medicine are forcing lead drug makers to look outside their research and development budgets. Novartis acquired AveXis in 2018, which received US approval of the first gene therapy for spinal muscular atrophy earlier this year.
Roche, another Swiss drug maker, has also been on the acquisition trail and is currently in the process of buying Spark Therapeutics, the owner of a gene therapy for retinitis pigmentosa, a genetic disorder which causes a gradual loss of vision.
Beyond cell and gene therapy
The changes stemming from cell and gene therapies go beyond new potential treatments, however. Personalised medicine means more testing of patients to determine what exactly is wrong with them and to monitor how they are responding to treatment.
Demand for medical testing equipment and services is therefore increasing, benefiting medical tool companies in particular.
One such company, Thermo Fisher Scientific, is seeing increased demand for its help in manufacturing cell and gene therapies, and for developing the instruments and services needed to understand why a drug actually works.
The development of cell and gene therapy comes at an important time for healthcare companies, with the cost of researching and developing new drugs rising faster than drug prices.
That trend looks set to continue for the meantime, although the use of artificial intelligence might streamline drug discovery. The hope is that artificial intelligence improves the design of clinical studies and the manufacturing process.
We look for several factors when it comes to investing in healthcare. Given the political pressure on drug prices, it is important to look for companies that are taking novel approaches to target unmet needs, as well as considering the more traditional issues such as the opportunities in a company’s drug pipeline and how effective management are.
Conclusion
The implications of cell and gene therapies are profound. We may be on the cusp of a new era in medicine, where treatments are based more on us as individuals rather than generic treatments designed to work for whole populations. It could affect everything from treatments to how we fund and pay for drugs.
With our healthcare system currently designed to actively manage chronic conditions, the impact of personalised medicine may be as much organisational as physical. The real appeal of personalised medicine, however, will be a revolution in what we are able to cure and how.
Investors should remember that the value of investments, and the income from them, can go down as well as up. Investors may not recover what they invest. Past performance is no guarantee of future results. Any mention of a specific security should not be interpreted as a solicitation to buy or sell a specific security.
For more information, contact Michael Bull, Investment Director, Quilter Cheviot, Jersey, at michael.bull@quiltercheviot.com
Quilter Cheviot Limited is registered in England with number 01923571, registered office at One Kingsway, London, WC2B 6AN, England. Quilter Cheviot Limited is a member of the London Stock Exchange; is authorised and regulated by the UK Financial Conduct Authority; has established a branch in Jersey and is regulated under the Financial Services (Jersey) Law 1998 by the Jersey Financial Services Commission for the conduct of investment business in Jersey and by the Guernsey Financial Services Commission under the Protection of Investors (Bailiwick of Guernsey) Law, 1987 to carry on investment business in the Bailiwick of Guernsey; is regulated by the Dubai Financial Services Authority as a Representative Office (and its business name in Dubai is Quilter Cheviot Limited (DIFC Representative Office)). Quilter Cheviot Europe Limited, trading as Quilter Cheviot and Quilter Cheviot Investment Management, is regulated by the Central Bank of Ireland. Registered in Ireland: No. 643307. Registered Office: Hambleden House, 19-26 Lower Pembroke Street, Dublin D02 WV96. Accordingly, in some respects the regulatory system that applies will be different from that of the United Kingdom.
• This advertising feature was first published in the November 2019-January 2020 edition of Businesslife magazine