Genetic revolutions in biotech focus on a cross-section of mid-cap and small-cap companies in oncology (cancer treatment), mental health therapies, rare diseases and immunotherapies
Most of the firms have been in the news because of the great expectations fostered by DNA manipulation, protein engineering and gene therapies
The biopharmaceuticals companies are part of thematic ETFs such as
- ARK Genomic Revolution ETF – 40-60 holdings -
- Global X Genomics & Biotechnology ETF – approx. 40 holdings -
- Invesco Dynamic Biotechnology & Genome ETF – approx. 30 holdings -
- iShares Genomics Immunology and Healthcare ETF- approx. 60 holdings -
- Wisdom Tree BioRevolution Fund – approx. 90 constituents -
The funds provide diversification which spreads market risk between as-yet unproven medical research and drug developments
The extreme range of share prices – between the many disappointing results (down to -60% year-on-year) and the few outstanding performances, topping 100% - highlights the difficulty in identifying strong contenders
This is true for the individual investor, but also for stock analysts and even for the pharmaceutical giants themselves, committing to license fees in the early stages of development in clinical trials for promising but very uncertain outcomes
Special attention has been given to sub-industry classifications within the biotechnology segment, in an effort to highlight broad trends
- Poor records in Gene Therapies may not reflect on the potential value of research but represent an egregious case of "FOMO", premature investments at too high a price for fear of missing out
- The Immunotherapy and Oncology segments stand out with favorable records (on average)
Investors have been drawn to innovations which are likely to be deeply transformative of the entire biotechnology industry
It may be early days but scientific advances in the battle against cancer could be beneficial before long for patients and for investors
The best performers in this biotech selection - led by Immunotherapy - suggests so much