Up and Coming Biotech Innovations Investors Should Know About

CIO-032422 OSC2-Biotech trends_Scott Bakal-web

Art by Scott Bakal

In many ways, biotech is one the most exciting fields out there. We all witnessed the tremendous potential of biotechnology last year with the creation of coronavirus vaccines. But what technologies are going to dominate in the future?

CIO spoke with investors and an oncologist to learn what they are excited about. While 2021 wasn’t the best year for biotech, there is no doubt that over the decades, the industry has shown tremendous progress. From January 1, 2012, to January 1, 2022,the leading Biotech ETF iShares Biotechnology had returns of over 240%. The current state of the biological science indicates that there is lots of room to continue growing, according to Darren Chervitz, a portfolio manager for the Jacob Discovery Fund at Jacob Asset Management. He says that between 30-40% of his portfolio is invested in biotech companies because of their high potential returns in five to 10 years.

“It’s been this nonstop, nonstop kind of relentless march in progress towards really figuring out how to fix DNA in the human genome,” said Chervitz. He said that our understanding of genetics and gene editing technologies are rapidly improving, and with each new advance comes a whole host of new potential therapies that can build off it.

Other investors, like Andre Perold, CIO at HighVista Strategies, agree.

“I would say the most promising innovations often involve gene therapies, oncology treatments, or rare diseases,” said Perold. “The opportunities are truly vast.”

CAR T-cell Therapy, the Groundbreaking Cancer Technology

What if you could train a person’s immune system to attack cancer? Unlike chemotherapies, this kind of treatment could kill the cancer cells without harming the patient. And that’s exactly what scientists working in CAR T-cell therapy are doing. The process involves taking a patient’s blood and editing the DNA of the patient’s T-cells. The T-cells, which are part of the immune system, are then able to attack the cancer when re-inserted back inside the patient’s body.

There are already five CAR T-cell therapies approved by the FDA with various levels of efficacy. Right now, scientists are working on making it more scalable and affordable.

Chervitz’s Discovery fund is currently invested in multiple companies working on CAR T. Chervitz highlighted Precision Biosciences because of the company’s work on creating a universal donor system of CAR T-cells. If it works, cancer fighting T-cells could be produced so that each individual patient wouldn’t have to have blood drawn to create the T-cells.

“It’s the sort of thing where if it works out, it’s going to do phenomenally well,” said Chervitz.

KRAS Gene Inhibitors – Another Potential Cancer Breakthrough

Dr. Elquis Castillo, an oncologist, says that while he hasn’t worked with CAR T technology personally, the current clinical trial results seem promising. In his own practice, he’s particularly hopeful about treatments that inhibit a gene called KRAS that controls cells growth.

In certain cancers, the KRAS gene is often overexpressed, causing cancers to spread more quickly. Inhibiting the gene can help slow the spread down and save lives. However, the current inhibitors don’t work on all cancer cells.

New treatments by companies are targeting KRAS genes that are not receptive to current inhibitors and seem to be showing promise, according to Dr. Castillo. Private equity companies like Affini-T, Auricula Biosciences and Frontier Medicines have successfully raised money to develop therapies that target those genetic mutations.

Rare Diseases – Beyond Gene Therapy

Investors have known about gene therapy, which usually uses viruses to change the underlying DNA of a patient, for decades. However, there are other lesser-known technologies shaking up the rare disease space as well. One is called gene modulation, and instead of changing the underlying DNA of a patient with a disease, it changes the way the genes are expressed.

Because gene modulators do not change the underlying DNA of the patient, they usually don’t trigger as severe of an immune response. The technology has been highly lucrative for the pharmaceutical company Vertex, which was able to develop a drug called Trikafta that halts the disease progression of cystic fibrosis. The lung disease usually kills people in their 30s and 40s, but the drug is so effective that it is expected to give patients a normal life expectancy, according to the Washington Post.

Spinraza, another gene modulator drug designed to treat a spinal muscular atrophy, was developed by Ionis Pharmaceuticals, and has also shown promising results. Though the disease often kills infants before the age of 2, all babies treated with the drug were still alive after continuous treatment with the drug for 4.8 years. After the remarkable success of these treatments, some private biotech companies like Pencil Biosciences are beginning to focus specifically on modulation.