Markman Capital Insight

Medicine now designed just for you

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Precision medicine promises to change health sciences by using data analytics and what we know about ourselves to tailor personal therapies and treatments.

Like most of the awesome ideas changing the current technology landscape, precision medicine is rooted in a fundamentally simple concept: One size shouldn’t fit all. Doctors should be able use technology to deliver the right treatment to the right person at the right time. It all seems simple enough. Getting to that point is bit more complex.

It started with the sequencing of the human genome. At an initial cost of $3 billion and 13 long years of research, the outlay of monetary and human capital was extreme. Yet the project was bountiful. It allowed scientists to learn about illness at the cellular level. They could then determine what precisely went wrong and, at least in theory, determine a treatment for the mutation.

For example, most patients currently diagnosed with cancer undergo a battery of oncology tests and usually end up with chemotherapy. That one size fits all treatment carpet bombs everything, killing good and bad cells indiscriminately. Precision medicine is more of a smart bomb. Doctors locate the mutation at the cellular level, find the specific drug treatment to correct the abnormality and calibrate the dosage based on personal metrics.

The theory is great and there has been a lot of promising work. The only holdback is cost.

Technology is helping. Today powerful cloud-based computers using advanced algorithms can sequence the human genome in less than a week for as little as a few thousand dollars. Soon it will be within the realm of possibility to screen every patient. And it won’t end with genes. Scientists are analyzing the microbes on us and in out gut, environmental factors and even our diets to tailor treatments for illness that meet our individual needs. Sensor data from wearbles like Fitbits, smart watches and phones will help too. It will be true personalized medicine.

In January of 2015 President Obama announced he would be adding $215 million to his annual budget for a comprehensive precision medicine plan. With bipartisan support -- a rarity is the current political environment -- the plan will work with most of the leading medical facilitators. The National Cancer Institute will do research into the genomic drivers of cancer. The Food and Drug Administration is being tapped to develop new testing techniques to expedite the drug approvable process. The National Institute of Health will help build a 1 million volunteer sample group to draw more data. And a consortium of privacy groups is being consulted to maintain strict privacy standards.

Pharmaceutical companies are gearing up. In 2015 Roche promised as much as $1 billion to Blueprint Medicines (BPMC) for five small molecule projects in development. In January 2016 Roche announced it would spend more than $1 billion or a 56% stake in Foundation Medicine, a molecular and genomic diagnostic company. Illumina Inc. (ILMN), another diagnostic service provider, has formed similar alliances with Germany’s Merck KGaG, AstraZeneca (AZN) and Sanofi (SNY).

Every human is unique. We are a product of our chemistry and environmental factors. It makes sense to build healthcare treatments tailored to that uniqueness. Ultimately it could be less costly and more effective. Until recently, it was impossible. Data and the ability to understand it, is changing everything. Precision medicine is coming and it will be an investment bonanza. The companies named above are just the beginning.

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About Jon Markman:  A pioneer in the development of stock-rating systems and screening software, Jon Markman is co-inventor on two Microsoft patents and author of the bestselling books The New Day Trader Advantage, Swing Trading and Online Investing, as well as the annotated edition of Reminiscences of a Stock Operator.  He was portfolio manager and senior investment strategist at a multi-strategy hedge fund from 2002 to 2005; managing editor and columnist at CNBC on MSN Money from 1997 to 2002; and an editor, investments columnist and investigative reporter at the Los Angeles Times from 1984 to 1997.

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