Gene-editing stocks could be gaining momentum

Investors with experience in healthcare and biotech know that January marks the arrival of the widely attended JPMorgan Healthcare Conference.

This year it’s taking place virtually, but that doesn’t stop the event from fueling the usual chatter and optimism directed at specific corners of the biotech space. Among the companies generating buzz at this year’s conference are those in the gene editing arena, and this could have implications for exchange-traded funds such as the ARK Genomic Revolution Multi-Sector Fund (CBOE: ARKG).

As a genomics ETF, it stands to reason that ARKG is tapped into the gene editing business, and it is an ETF that could benefit from some positive momentum after a tough 2021. Although in a gradual fashion, signs are emerging that gene editing stocks could be better things this year.

“Start-ups have been particularly affected by the development of treatments to correct defective genes. But at JP Morgan’s virtual healthcare conference this week, gene-editing companies like Intellia Therapeutics (ticker: NTLA) and Editas Medicine (EDIT) say this year will bring some exciting developments, ”Bill reports. Alpert for Barron’s.

Intellia Therapeutics is the sixth component of ARKG with a weighting of around 4%, while Editas Medicine is a smaller member of the ETF portfolio with a weight of 0.58% as of January 11.

Intellia has $ 1 billion in cash and is taking steps, including partnering with larger biotech companies, to expand its gene-editing capabilities.

“Using the rallying ability of a Crispr molecule, Intellia and its partner Regeneron Pharmaceuticals (REGN) have eliminated the defective gene responsible for a toxic protein that damages nervous and heart tissue,” according to Barron’s.

With large-cap biotech and pharmaceutical companies looking to rebuild their pipelines and access technological advancements and next-generation products, partnering with companies like Intellia and other ARKG components makes sense.

Another such deal emerged on Monday when Pfizer (NYSE: PFE) announced an in vivo gene editing deal with Beam Therapeutics (NASDAQ: BEAM), which is another component of ARKG. The aforementioned Editas has its own partnership with a top-notch pharmaceutical company.

“In partnership with Bristol Myers Squibb (BMS), Editas is developing therapies that modify immune cells to fight tumors. The gene-editing company had nearly $ 660 million in cash at the end of September, but in its statement on Monday, it said it was seeking partners to help advance the applications of its editing technologies in the treatment of cancer and regeneration of damaged tissue, ”reports Barron’s.

It remains to be seen whether ARKG will rebound this year, but the news feed from early 2022 suggests that the fund’s holdings are, at the very least, trying to generate positive catalysts.

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The opinions and forecasts expressed herein are solely those of Tom Lydon and may not come to fruition. The information on this site should not be used or interpreted as an offer to sell, a solicitation of an offer to buy or a recommendation for any product.

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