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Is this the biggest investment opportunity of 2021?

Lucy Dean
·3-min read
Fidelity Australia managing director Alva Devoy appears at the Women's Money Movement event in March with Julia Lee and Lucy Dean.
Fidelity Australia managing director Alva Devoy appears at the Women's Money Movement event in March. (Image: Patrick Stevenson).

Companies using genomics technology have been described as one of the major investment trends for 2021 to watch, as COVID-19 brings more interest to the sector.

Genomics is the study of a person’s genome or DNA, and is increasingly being used to create bespoke, or tailored treatments and medicine.

The global pandemic has highlighted the need for greater investment in Australian genomics research, Stoic Venture Capital partner Geoff Waring said.

“Venture capital firms see big potential for genomics technologies,” Dr Waring said.

“Example promising applications are mRNA vaccines for diseases such as malaria or HIV, precision patient-specific pharmaceuticals, or genetically engineered Chimeric Antigen Receptor (CAR) T cells which had miraculous results for even late stage cancer.”

It’s something Fidelity Australia managing director Alva Devoy also noted as a big trend to watch.

Speaking at a Yahoo Finance Women’s Money Movement event in March, Devoy said one of her personal big bets is genomics research, and in particular American genomics company Illumina (ILMN: NASDAQ).

“Why is that important? It’s because medicine is now becoming tailor-made to the individual, so if I was to be diagnosed with breast cancer, my genome would be typed and I would be told, ‘You will respond to these types of drugs very well for that type of cancer, based on your personal map.’

“So you can see where that sort of thing is going for society,” Devoy said.

Ilumina saw revenue hit US$1.09 billion in the first quarter of 2021, up 27 per cent year on year. It predicts full year revenue will grow between 25 per cent and 28 per cent.

Devoy believes companies like Illumina will drive profitability as they’re currently underpenetrated.

It’s historically been prohibitively expensive to have a genome mapped - often as much as $100,000.

However, that is beginning to come down in price, with Australia in particular investing in genome mapping for sports.

“I’ve been typed, my partner has been typed because he’s got underlying issues, it’s just part of our insurance plan. So it’s an underpenetrated area. That’s my personal big bet at the moment,” she said.

Governments must also invest heavily in genomics research as the risk of pandemics increases, McKinsey & Company has warned.

“Without sequencing data, public health authorities are blind to viral mutations that may reduce the efficacy of current response tools (for example, safety protocols, tests, vaccines, and clinical care) and are unable to take precise public health action,” the consulting firm said.

“Sequencing is a powerful tool that enables public health authorities to improve precision, efficacy, and efficiency of public health response.”

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Image: Yahoo Finance
Image: Yahoo Finance