A crack in creation

**Urgent message from the publisher: “I sent my chief tech analyst to a secret location in rural England, under risk of arrest. If we’re right, his discovery could create a new wave of British millionaires. Watch our urgent video investigation here, now. *This video will be pulled from the internet at 6pm tomorrow).**

“The power to control our species’ genetic future is awesome and terrifying. Deciding how to handle it may be the biggest challenge we have ever faced.” Jennifer A. Doudna – author, A Crack in Creation

Eoin Treacy profile picture Exponential Investor

Eoin Treacy here.

I asked Harry if I could write to you directly today about one of the biggest technological shake-ups in history.

It’s controversial. It’s scary. It’s enthralling. And it just might be the biggest leap in human progress in the history of our species.

Today, I’d like to show you how a small UK biotech firm I’ve uncovered fits into this incredible story.

I believe it is going to become a big player in this new medical science frontier.

At the very frontier of medical research, this company is unearthing revolutionary cures for diseases that could help millions of people. It’s been a long road. And I’m going to show you how – at last – this company may have succeeded where so many others have failed.

Many of the world’s breakthrough medicines of the coming years may ultimately use this little firm’s kit. It’s deploying a smart solution to a difficult problem, which I believe will see it come out on top of the tech evolution that is going to change the face of healthcare beyond recognition.

This is the kind of change that happened a century ago with the introduction of antibiotics. It introduced something new that both disrupted the previous way of treating bacterial infections but also increased the size of the healthcare market to a size that dwarfed what existed before.

What I see happening today is on a similar scale.

We are on the cusp of an evolution in healthcare that will see a transition to whole life care, focusing on constant monitoring, genetic profiling and lifestyle management rather than what might best be described as disaster management today.

And I think I’ve spotted the perfect way for British investors to play it.

I can’t tell you the name of the company, that wouldn’t be fair to my subscribers. But I can share with you why I am so excited for its future… and why the technology it has harnessed is so ground-breaking.

Why “one shot” biotech firms are failing

When we get sick, the thing we want more than anything else is to get better. That’s why we go to the doctor, endure the tests and pay for the medicine. We want to get better.

However, a pharmaceutical company’s revenue stream stops when we get better. Businesses are built on repeat customers and if your customer never needs you again, that’s not a very good business model.

This may sound cynical, but keep in mind that it’s better for pharmaceutical companies to focus on how to ease our suffering from a condition we will never get better from. That’s a much better business model because the revenue stream lasts much longer and provides much greater security for company earnings.

In other words, you get a lot of repeat business on top of the potential to grow your business, which is what every company wants. As awful as it sounds, curing patients isn’t always the best business model for a pharma or biotech firm to pursue.

Let me give you a great example.

Back in 2016, Nick O’Connor and I went to the MIT Technology Review conference in Boston. It was packed with the CEOs of emerging companies who were eager to promote, or perhaps more accurately hype, their products. I was particularly impressed by the president of Spark Therapeutics, Katherine A. High, who was much more interested in relating the difficulties they were trying to overcome in bringing their products to the market.

She was at pains to explain how she had spent the first 25 years of her career painstakingly overcoming one failure after another as they drew progressively closer to understanding how to reprogram the immune system to fight cancer cells.

She said that the introduction of CRISPR Cas-9 gene editing technology was a game-changer for their business. It both reduced the cost and sped up the pace of innovation. It took the painstaking iterative process of drug discovery and put it in overdrive. That allowed the company to IPO in 2015.

Spark Therapeutics’ stock ticker is ONCE. That encapsulates the business model. The company is developing one-shot genetic solutions to chronic conditions. In other words, it is dealing in cures rather than treatments.

The kinds of products it wants to bring to market mean that with one injection you will develop a genetic immunity to the lifelong chronic condition you have been dealing with and spending money your whole life on trying to manage.

It’s the kind of thing patients are getting really excited about.

Prior to the release of the company’s Luxturna drug, there was no treatment for any form of inherited retinal diseases, many of which eventually end in blindness. With the introduction of the drug, there is a real solution that can provide a genetic repair that arrests the speed of vision impairment.

That is a very different solution than what we are used to. Generally, a drug is designed to treat a bacterial infection or a viral infection or attempts to rebalance blood chemistry, but does not treat the underlying genetic cause of a long-term affliction. Spark Therapeutics is dealing in cures.

Yet at the beginning of last week, the share was trading at the same level as it was at the end of the first day of trading back in 2015. For a company that is developing such an exciting set of products, that’s a dismal performance.

In fact, on a relative basis, compared to some of the other exciting companies in the biotech sector, which have multiplied many times over in the same timeframe, it is truly a dismal performance.

So, what is the company doing wrong?

Innovation alone isn’t enough: you need a sound business strategy too

When we get down to first principles, it’s blindingly obvious.

It is dealing in a suite of rare disorders and by introducing a cure it is reducing the number of potential patients. There is nowhere for it to grow and if it is successful, there will be no more patients and therefore no business.

The only way it can grow is to develop completely new solutions for other genetic disorders. That’s not impossible, but it’s not a reason to buy the share for regular investors.

However, big pharmaceuticals companies have a very big reason to buy these kinds of companies. Genetics plays a significant role in who develops chronic diseases like Type-2 diabetes, arthritis and cancer. Genetics plays a role in why some people can be lifelong smokers and never get lung cancer. Genetics is why some people develop heart disease from high cholesterol and others can have much higher levels and still live long fruitful lives.

The reason these companies are being bought up is because the big pharmaceuticals companies know that the current concentration on rare disorders is the equivalent of a proof-of-concept effort.

These businesses might not be making a lot of money. But they’re proving the innovation side of the equation stacks up. The big pharma companies are likely stepping in to add more commercial strategy and sound business models.

That could be a very big deal indeed.

Today we are seeing genetic products come to market and companies begin to make money. That’s has been the green light for acquisitions because now rather than promises, we have evidence these products can generate revenue.

Now the real work begins, which is to move on to wide market diseases that are global in scope and affect millions of people. That is where the big challenge and opportunity arises for genetics and pharmaceuticals companies.

Large pharmaceuticals companies want to be the ones to develop genetic solutions to chronic diseases and wish to squeeze the maximum revenue from that process while it lasts.

Smaller companies that are full of enthusiasm about the intellectual stimulation they get from creating cures are not receiving love from investors because they have no plan for profitability.

It’s a catch-22 because we know that eventually there are going to be genetic solutions to diabetes and arthritis, but they will not reach market until someone figures out a business model to profit from it.

Enter this month’s recommendation.

Has this small UK stock built “CRISPR’s business partner”?

In 1996, this company, developed its ground-breaking vector delivery system for genetic medicines of the future. That piece of technology is the backbone of the company and informs how it has been able to prosper for so long.

Effectively the technology is one innovative way of delivering genetic medicines into the human body.

If you’ve heard about this sort of thing before, it’s because I have written to your previously about CRISPR-Cas 9 gene editing. Both are gene editing vectors and while there is still an acrimonious lawsuit ongoing as to who owns the intellectual property relating to CRISPR,  this company owns the intellectual property , so there is no equivocation on that front which could impact the company.

While they hold similarities, the ground-breaking vector technology has clear benefits over CRISPR. What really sets apart this company from other biotech companies is they have developed a gene editing technology that is compatible and enhances other medical processes.

It’s a key piece of intellectual property that represents a moat around the additional products it creates that rest upon it. That’s one of the primary reasons the company has a clear advantage relative to other companies in the gene medicine business.

And it’s clearly not the only one.

The company has pursued a model of building key partnerships and relationships with major pharma firms. Many of these partnerships could lead to genuinely world-changing medicines. So not only are we getting its own technological advantages … we’re getting the advantages of its partnerships also. Some people will never get on board with genetic editing, from a philosophical, religious or even moral point of view. Personally, I believe the world will leave them behind.

Genetic editing is a “platform technology”, like the combustion engine, the personal computer or the internet. It will give rise to other technological processes we cannot even dream of yet.

And the companies at the frontier, building that framework now could become some of the biggest companies of the next half century.

Just as General Motors, IBM and Google are today.

How high could this little stock soar?

In my eyes I believe this stock could take off and I’m predicting a 655% increase over the long term. That is exponential growth from a UK small cap to a global powerhouse in the genetics industry.

All the indicators are pointing in one direction and that’s up. Not only is it pioneering a groundbreaking technology, one that allows it to pursue one-time genetic cures with a sound business model, but it is also making strategic partnerships that support its business, allowing it to develop its own revolutionary drugs.

Furthermore, it has a significant pipeline of potential products that are likely to flesh out revenue growth forecasts in the future and runs a pretty lean operation with just over 300 employees, which is a relatively low overhead for such an impressively innovative company.

This is a company on the forefront of a technological advancement in the genetics business. It’s companies like these that I am consistently unearthing for my customers in my tech investing service Frontier Tech Investor.

I don’t just concentrate on genetics or medical stocks, although these form a large part of my research, but I look out for stocks in technology, energy, even cannabis.

Every month I bring you companies that are using technology to break into new territories where just a small stake could multiply your wealth. I also bring you weekly updates focusing on the tech world as a whole where you can really understand my process for how and why I choose my recommendations.

Obviously, it’s not as simple as that. It takes me weeks of research just to come to you with one stock pick such as the biotech stock I have discussed with you today. But, that’s the beauty of it. I do all the hard work and then bring you amazing stocks that could seriously increase your wealth.

If you’re interested in discovering the name of the company I’ve been telling you about today click here now.
I’ve arranged a way for you to come on the inside, try out Frontier Tech Investor, collect a special tech investing package, and see if it is for you. All without any financial commitment.

I believe my latest recommendation will be the clearest beneficiary from the future of the genetics industry and is something you do not want to miss out on. It’s not a guarantee there never is when you are in the markets.

Frankly, I’m not looking for guarantees. I’m looking for huge promise from technology that can and is already changing the world.

That is what you will find in Frontier Tech Investor. Try it out now and you’ll also receive two free books about breakthrough technology.
All the best,

Eoin Treacy
Investment Director, Exponential Investor

PS I’m not the only tech-head here at Southbank Investment Research. You may have seen that my colleague Sam Volkering has uncovered something lurking in the South West. He cannot openly disclose the location of the company he believes could generate “a new wave of British millionaires”. In fact, if he did so, he could be arrested.

But I can tell you this – it is the ONLY UK-listed company legally allowed to supply a chemical compound serving an industry estimated to grow 700% in the next year alone.

I don’t know how Sam found this one. And I’m a little jealous he got there first!

He travelled to a top secret location and recorded a video investigation to tell you all about it.

You can watch that here, now.

*Warning: because of the sensitive nature of the information in the report, it will only be online until 6pm tomorrow.*

Category: Genetics and Biotechnology

From time to time we may tell you about regulated products issued by Southbank Investment Research Limited. With these products your capital is at risk. You can lose some or all of your investment, so never risk more than you can afford to lose. Seek independent advice if you are unsure of the suitability of any investment. Southbank Investment Research Limited is authorised and regulated by the Financial Conduct Authority. FCA No 706697. https://register.fca.org.uk/.

© 2020 Southbank Investment Research Ltd. Registered in England and Wales No 9539630. VAT No GB629 7287 94.
Registered Office: 2nd Floor, Crowne House, 56-58 Southwark Street, London, SE1 1UN.

Terms and conditions | Privacy Policy | Cookie Policy | FAQ | Contact Us | Top ↑