3 Promising Gene Therapy Stocks

PrudentBiotech.com ~ Gene Therapy

  • Biotech stocks and the broader healthcare sector remain under pressure.
  • Promising opportunities exist in the small-cap and mid-cap segments.
  • Gene therapy remains the emerging scientific frontier in biotech.
  • 3 promising small-cap gene therapy stocks for a biotech portfolio.

Biotech Pulse

PrudentBiotech.com ~  Biotech pulse

The Nasdaq Biotech (IBB) and the S&P Biotech (XBI) indexes have struggled since March as the broader healthcare sector (XLV) declined following growing momentum amongst the presidential candidates for a universal healthcare plan. This was at a time when the broader market indexes, the Nasdaq Composite (QQQ), and the S&P 500 (SPY), set new highs, prior to the recent pullback.

The trade friction has a more restrained immediate impact on the biotechs and affects the broader biopharma sector mostly in the area of patent protection and market exclusivity terms that are negotiated. But the flight from risk, as expectations of an imminent trade resolution were derailed, hurt the speculative sector, like the biotechs, more sharply.

The healthcare overhaul and uncertainty will remain an ongoing theme until the elections, leading to higher sector volatility and restrained gains, as highlighted in the article 2019 Outlook: Biotech Bonanza: 2019 Outlook On An Uphill Battle. Nonetheless, there will be attractive opportunities, particularly in midcap and smallcap segments, to outperform the biotech indexes. One segment of biotechs that is attractive for its emerging potential is discussed below.

Gene Therapy

PrudentBiotech.com ~ GENE

Source: BioSpace.com

Gene therapy is a generational scientific advancement with the potential to make a growing and gigantic impact on healthcare. 

Genes are part of the DNA that provides the blueprint instructions to the cells for making proteins. A mutation or a defect in the gene can prevent the cells from creating an accurate expression of the protein or a diminished ability to do so. Gene therapy is the science of altering DNA to restore normal protein expression by the cells or even silence proteins that may cause debilitating diseases.

There has been a surge of interest in gene therapy as key milestones are being achieved, particularly in rare diseases, and the scientific advances are pushing the frontiers of genomic medicine. Significant progress has been made in improving the understanding of using different delivery vehicles or vectors to safely deliver the therapeutic DNA altering payload. CRISPR, which makes addition and deletion edits directly to the DNA strand, is a popular editing tool in gene therapy. Another approach to correcting gene mutation that is gaining popularity is the use of viral vectors to deliver the therapeutic payload. Any viral vector needs to be non-pathogenic in order to minimize any immune response so that the vector particle, and the embedded payload, is not destroyed by the antibodies.

Two types of viral vector platforms being used are the Adeno-Associated Virus (AAV) for the in vivo gene therapy and the Lentivirus from stem cells for ex vivo gene therapy. Using particles of AAV, which is not known to cause disease and typically has a mild immune response, is garnering a lot of interest as a virus vector in gene therapy for many targeted diseases. But challenges exist particularly around AAV-antibodies which can pre-exist in patients. Research has advanced to a point where variants of AAVs are being used to improve the immunogenicity profile, which means minimal immune reaction when a viral vector is introduced in the body. 

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Terry Caruso 4 weeks ago Member's comment

You left out the big dog, $RGNX