Trends in health care can become powerful investment tailwinds. Genomics is a good example of this.
Simply put, genomics explores how genes affect us. Now, there’s obviously much more to it than that. It’s a complex technology with almost unimaginable implications.
We can think of genomics like a tailor making a suit that fits you perfectly. In medicine, doctors can use information about your genes to choose medicines and treatments that work best for you. For example, if two people have the same kind of sickness, the best medicine for one person might not be ideal for the other because their genes are different.
This can be especially important in treating serious diseases like cancer. By studying the genes in cancer cells, doctors can find specific ways to attack these cells without harming the healthy ones. It’s like finding the weak spot of an enemy so you can defeat it more effectively.
This same idea can be applied to early detection.
GRAIL Discovered Genomics’ Potential
Researchers know that cancer cells often release tiny bits of their DNA into the blood. By taking a blood sample and using genomics to read the DNA in it, doctors can spot these cancerous bits. It’s like finding a fingerprint at a crime scene that tells you who the rule breaker is.
This means genomics can help figure out exactly what type of cancer is developing even before it causes any symptoms. So it’s like knowing exactly what kind of trouble the offender is likely to cause, even before they do it.
This isn’t just a theory. Biotech company GRAIL offers the Galleri test, which can detect a signal shared by over 50 types of cancer. The company claims this test has 99.5% specificity. It can predict the cancer signal origin with high accuracy to help doctors treat the disease.
The company believes the test should be part of an annual exam for many people. And this could be profitable for both GRAIL and its investors.
In fact, GRAIL has been an interesting case study for anyone interested in biotech investing…
Making Sense of ILMN
Illumina Inc. (Nasdaq: ILMN) created GRAIL in 2016 with a spinoff that allowed it to aggressively pursue funding for the company’s innovative technology.
In 2020, Illumina decided to buy GRAIL back for $8 billion. Regulators in the U.S. and EU immediately objected to the deal.
It seems obvious why Illumina would want to own GRAIL. The work of GRAIL, supported by Illumina’s technology, represents a significant step toward personalized medicine. By detecting cancer early through genomics, treatments can be more targeted and maybe even more effective.
Illumina could then extend this concept to help detect other diseases. However, regulators are worried that Illumina could use GRAIL’s cancer test as a cash cow to boost its own profits instead of pouring that cash back into research and development for those new products.
Regulators often make this claim and companies respond by going to court. The courts often side with the company recognizing that management will make the best use of corporate resources.
Nonetheless, Illumina’s history with GRAIL shows how companies are applying advancements in genomic technology to real-world challenges like cancer detection. It also illustrates the interplay between technological innovation, commercial interests and regulatory oversight in the rapidly evolving field of genomics.
It’s a challenging story for investors to make sense of. That’s why I turn to experts like my friend Adam O’Dell to help me identify opportunities in the biotech field with clarity.
Adam and his team study and track cutting-edge trends in the market that no one else sees and use the Green Zone Power Ratings system to uncover the strongest stock investments to grow your portfolio.
And using that system shows that ILMN is one of the highest-risk stocks out there with a 0 out of 100 rating!
One of the most promising plays he’s discovered is an artificial intelligence company treating infectious diseases using genomics.
To learn how you can access his research on this high-conviction stock recommendation, along with many of the other disruptive investments his team is tracking, check out his special Green Zone Fortunes presentation here.
Until next time,
Mike Carr
Chief Market Technician
