Exciting Innovations In Nanotechnology On The Edge Of Coming To Commercial Markets

Includes: BBH, FBT, IBB, XBI
by: Robert Hallberg

A lot of progress has been made in the field of biotechnology and biomedicine since the completion of the human genome projects in 2003. The completion of this project was a huge milestone, and it was supposed to usher in a new era of genetic medicine with new cures. But sequencing the human genome and actually understating its inner working turned out to be something entirely different.

Only now, a decade later, are we starting to understand the insides of the genetics of the body and the genetics of certain disease. There have been a lot of advancements in the research labs and these advancements are just now on the edge of coming to the commercial market.

One area in which biomedicine is making exciting progress is in the field of treating cancer. This is an area in which not much has happen since the 1970s. The standard treatment over past 40 years has been for doctors to take biopsies, study the biopsies, and provide the patient with chemotherapy or radiation therapy.

A big problem with this approach is that these two therapies are delivering toxic material and toxic radiation to our bodies damaging healthy cells. There hasn't been a good way of just targeting the problem cells and avoiding healthy cells until very recently.

We now have the ability of treating cancer cells with more accuracy, and the level of precision is improving quickly. For example, two technologies already available are Proton therapy - consisting of focused proton beams. This technology might be replacing traditional radiation therapy within a near future. It has a much tighter beam, which can be controlled in three dimensions, eliminating much of the damage done to healthy cells. Another new technology called Liposomal therapy take traditional chemotherapy drugs and places them inside liposomes, which can infiltrate cancer cells more selectively with less damage to healthy cells.

In clinical trials

The fight against cancer can be compared to modern warfare, where the biggest challenge is to fight against insurgences that blend in with the local population. We already have the weapons to kill the cancer cells but the biggest challenge is to find them and target them without harming any "civilians."

Cancer cells are part of our own body, and the difference between healthy cells and cancer cells is minuscule. That is why they have been hard to target and hard to detect. But biomedicine is finding new creative ways of finding them and removing them with precision.

For example, a startup in Mountain View, California (Metabolomx) recently started clinical trials on a breathalyzer that can spot lung cancer with 83% accuracy. It also has the ability to distinguish between several different types of disease, something that usually requires a biopsy.

Other products are also in clinical trials right now that will be able to target cancer cells with much greater precisions and with fewer side effects. Some of these techniques are Molecular targeted therapy, which aim is to disrupt cell duplication of cancerous cells, or Telomerase therapy which has a similar function. Its purpose is to inactivate the telomerase - an enzyme that enables cell replication. Another drug that might make it into the market as early as this year is called the Reovirus - a virus that feasts on specific cells with particular characteristics, like cancer cells.

On the horizon

Even more sophisticated technologies are on the horizon. Technologies like RNAi and Nanobubbles to fight cancer can already be found in laboratories. RNAi (RNA interference) is a form of genetic medicine that can "turn off" messenger RNA carrying bad genetic information before that RNA can do its harm. Nanobubbles is another delivery system currently being tested on animals. It delivers chemotherapy drugs in small packets of nanoparticles to cancer cells. After they have accumulated around the tumor, ultrasound can be directed at the target, breaking the bubbles and releasing the drug directly onto the cancerous cells.

Preventive medicine

In terms of preventive medicine, a company called 23andme.com has a service offering genetic testing to check if a patient if genetically predisposed to any types of diseases. The patient can then take this information to his healthcare provider and develop a personalized prevention plan which may consist of a certain kind of diet, exercise, medication and testing.

Investment implications

All these new technologies are exciting but investing in this industry can produce a number of challenges. The industry is very capital intensive and some drugs can cost half a billion to $1 billion to develop. In addition, the industry is full with cumbersome regulations that make it difficult to bring an early pre-revenue biotech company to market. As a result, 90% of these companies never make it.

A company that is targeting cancer, for example, might require up to a billion dollars to complete testing and make it through all the regulatory hurdles. Knowing of the immense cost for a drug that has perhaps a 10% chance or less of making it to market, many smart investors spread risk around.

Nevertheless, the advancement in technology and the race to cure cancer has led to a boom in funding. New exciting technologies are coming to the market at an increasing speed and some of these new technologies will have a profound impact on both humanity and the investors involved.

Picking a winner in this field is difficult. It requires a lot of research and perhaps a little but a luck. Diversifying through ETFs such as iShares Nasdaq Biotechnology ETF (NASDAQ:IBB), SPDR Biotech ETF (NYSEARCA:XBI), Market Vectors Biotech ETF (NASDAQ:BBH), and First Trust Amex Biotechnology Index ETF (NYSEARCA:FBT) might be a better option for many retail investors.

Reference: Casey Research.

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