How DNA changed the world of medicine and drives investment opportunities today

Key points: 

• The discovery of DNA and the Human Genome Project have paved the way for innovations in biotech and healthcare
• Technological improvements have sped up genetic sequencing, allowing biotech firms to develop drugs faster
• We see compelling potential long-term investment opportunities within genetic medicine

April 2023 marks two major anniversaries in the scientific world, both of which changed the path of medicine, and remain a significant factor in the scientific innovation that continues to this day.

It is 70 years since biologist James Watson and physicist Francis Crick published their discovery of the double helix structure of DNA.

It is also the 20th anniversary of the completion of the Human Genome Project, which mapped the entire human genetic code – a huge international feat which brought together decades of scientific innovation and discovery.

The biotechnology sector’s innovative nature has unsurprisingly attracted a wave of investor attention over the years. And while it can be at times a volatile sector, in the past two decades, it has delivered impressive returns of more than 500%.¹

A new era for genetics

Understanding how DNA, a polymer of four repeating units or bases, carries the genetic instructions for development has been crucial in many healthcare advances, in particular genetic medicine. The order of these bases forms our individual genetic code and the science of measuring this unique code is known as genetic sequencing.

There are many pioneers who deserve credit for these advances, some of whom have received awards for their work – Watson, Crick and Maurice Wilkins won a Nobel Prize in 1962, while Paul Berg, Walter Gilbert and Frederick Sanger won in 1980 for their role in the development of genetic sequencing.

More recently, Emmanuelle Charpentier and Jennifer Doudna were awarded the Nobel Prize for Chemistry in 2020 for the discovery of a gene editing tool, CRIPSR/Cas9, and Svante Pääbo received a Nobel Prize only last year for his ground-breaking studies on human evolution, further underpinning our understanding of genetics.

There are, of course, many more who remain formally unrecognised, including Rosalind Franklin, but who have made important contributions to the field. 

And scientists today continue to be inspired by, and build on, the work that has gone before. A simple scientific reference search shows that more than 325,000 scientific papers on genetics were published in 2022 alone – demonstrating the sheer volume of work taking place in this field, which is fundamental to many of the advances and investment opportunities in biotech today.²

The completion of the Human Genome Project marked the start of a new era of medical innovation in which scientists could investigate and comprehend the underlying genetic causes of disease. While many diseases are complex, involving contributions from multiple genes and environmental stimuli, there are thought to be 5,000 to 8,000 individual diseases that are caused by a single genetic mutation.³

Many types of cancer are now known to be caused by specific genetic mutations and in many hospitals cancers are now diagnosed – and treated – by their genetic driver rather than the cancer’s location in the body. There have now been more than 180 cancer therapies approved in the US that specifically target the genetic fault of the underlying cancer to treat the disease.⁴

More than one million diseases have now been identified as being associated with genetics, and research is ongoing.⁵ Recently, a huge UK-based 10-year study on developmental disorders analysed the genetic codes of more than 13,500 families where children had unexplained conditions, and successfully provided 5,500 with a diagnosis. In the process 60 new diseases were identified.⁶

Innovating at a faster pace

Rapid improvements in sequencing technology have vastly reduced the time and cost of genetic sequencing over the last 20 years. Sequencing the first human genome took 13 years and cost $2.7bn. Today, thanks to recent technologies, the equivalent of an entire genome is sequenced every second and the process can cost as little as $200 – this is an exciting development that opens the door to many new discoveries.

Understanding the building blocks of DNA and how they form our genomes has also led to a rapid acceleration in the speed from discovery of a disease to diagnosis and development of a treatment. For example, spinal muscular atrophy (SMA) was first observed by physicians in the 1890s, but it took around 100 years for the mutated gene responsible for this progressive muscle degeneration disease to be identified.

It then took another 20 years for the first drug to treat the underlying genetic cause of SMA to be approved – Spinraza, from biotech firms Biogen and Ionis. It was only four years before there were another two drugs approved to treat the condition – Zolgensma (from Novartis/AveXis) and Evrysdi (from Roche/PTC Therapeutics). These drugs have dramatically altered the outlook for children born with this rare and often fatal disease.⁷

Another landmark example is the development of COVID-19 vaccines. It took only 63 days for Moderna and the National Institute of Health to get their mRNA-based vaccine into human tests after first receiving the genetic code of the virus.⁸ In less than a year, the vaccine was granted emergency approval. Recent data suggests that over 7.7 million deaths were averted by mRNA COVID-19 vaccines (i.e. those from BioNTech, Pfizer and Moderna) in the first year of availability alone.⁹    

Potential long-term investment opportunities

The use of genetics in medicine is progressing at a rapid pace, creating exciting new potential opportunities for biotech investors. There are also prospective opportunities in the wider industry supplying the ingredients necessary for the research, the sequencing, the analysis and applications – all key components of the value chain.

There are still hurdles to overcome and, as with all new technologies, it takes time to move from development to commercial success. But we see strong tailwinds behind biotech, underpinned by powerful long-term fundamentals and supported by structural shifts in demographics and lifestyles.

We believe that pharmaceutical and biotechnology companies putting the understanding of genetics at the centre of their research, discovery and development are creating huge value for patients and carers, both now and in the future, and present potentially compelling long-term investment opportunities.

References to companies are for illustrative purposes only and should not be viewed as investment recommendations.