Since our founding, Eventide has emphasized biotechnology as an important investment theme. But why do we think biotech is such a compelling investment opportunity? In this video, Senior Analyst Agustin Mohedas offers his insight.
Why do we think biotech is such a compelling investment opportunity today? I want you to consider a few of the elements that are involved in a high-growth industry. This typically starts with fundamental developments such as scientific innovations that leads to technological innovation that then leads to value creation.
I'll use the information technology industry as an example. The fundamental developments in the early 1900s, from IBM's early mechanical computers to Bell Labs' introduction of the transistor led to technological innovations such as the founding of Intel, the creation of the first network or the ARPANET and finally the development of the internet. These technological innovations laid the groundwork for companies to build products and services that generate value for consumers, such as Amazon, Apple and Uber. All of these technologies, services and products that we love today and we can't imagine our lives without are the result of about 100 years of fundamental and technological innovation.
Biotech is very similar. The fundamental developments like Edward Jenner's vaccination against smallpox or Alexander Fleming's discovery of penicillin, the first antibiotic, led to further technological innovation such as x-ray protein crystallography that allows us to view proteins in three dimensions. And the development of recombinant DNA or the first monoclonal antibody.
These technological innovations helped companies create products, namely drugs, that generated a lot of value for patients. In 1995, the first antiretroviral therapies were approved to treat HIV. This made HIV a long-term treatable disorder, whereas before it was a death sentence. In 2003, the human genome was sequenced. This led to an explosion in the research of genetically defined diseases. And as such, in 2017, the FDA approved the first gene therapy to treat an inherited genetic disorder.
While a lot of value has already been created, we still think we're in the early innings of the value creation that's possible for biotechnology. These include further developments in rare diseases, precision oncology, immuno oncology, bispecific antibodies, RNAI and anti-sense technologies, gene therapy, gene editing and epigenetics.
Next-generation technologies are the toolbox that we have to treat unmet medical needs. The development of next generation technologies such as small molecule drugs with ever-increasing selectivity, antibodies, antibody drug conjugates, bispecific antibodies, cell therapy (recently approved), RNAI, gene editing, and gene therapy will allow us to unlock tremendous value for patients.
At Eventide, we believe investors can invest for both performance and to make the world a better place.
This communication is provided for informational purposes only and expresses views of Eventide Asset Management, LLC ("Eventide"), an investment adviser. There is no guarantee that any investment strategy will achieve its objectives, generate profits, or avoid losses. Eventide's values-based approach to investing may not produce desired results and could result in underperformance compared with other investments. Any reference to Eventide’s Business 360 approach is provided for illustrative purposes only and indicates a general framework of guiding principles that inform Eventide’s overall research process. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.
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Agustin Mohedas serves as a Senior Research Analyst for Eventide. He is primarily responsible for evaluating and monitoring new and existing healthcare investment opportunities in the portfolios.