Check Up: Biotech is worth ‘US$4 trillion in 10 years’, and here’s where the smart money will go

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• Biotech could be a US$4 trillion industry in 10 years
• Genetic engineering and weight loss are two growing themes in the space
• We look at the best and worst performing ASX biotechs over the past month

Steve Jobs used to say that the most significant advancements of the 21st century would arise from the convergence of biology and technology.

He’s not far off the mark as the global biotech market is poised to triple to USD 3,995.22 billion (that’s $4 trillion) by 2032 – according to data from Precedence Research.

The market is witnessing unprecedented growth due to the increasing demand for food, prevalence of chronic diseases, and advancements in technology.

The research suggests that DNA sequencing and genetic engineering technology would be one area to see increasing investments over the next few years. This is a segment of biotech where drugs are developed using living cells, designed to target specific proteins, cells, and genetic pathways.

These drugs target a wide range of diseases, including cancer, autoimmune disorders, and infectious diseases. They’ve also been used to treat rare genetic disorders, such as cystic fibrosis and hemophilia.

Another example of genetic engineering is the use of DNA technology to produce insulin for the treatment of diabetes.

Recombinant DNA technology involves inserting a human gene for insulin production into a bacterial or yeast cell. This method has revolutionised the treatment of diabetes and has made insulin more widely available and affordable.

Ark fund manager Cathie Wood has been a strong believer in genetic technologies, and her portfolio reflects her conviction.

In a filing last week, Wood added to the Ark fund 6 million more shares of genetics biotech firm, Ginkgo Bioworks, a company that’s been a favourite of hers for a while now. Ginkgo has ongoing programs in cell engineering and enzymes, amongst others.

Weight loss is another growing theme

Another segment of biotech that could see huge demand going forward is obesity drugs.

According to Morgan Stanley, the recent frenzy around Ozempic and Wegovy could see the weight-loss drugs sector surge to US$77 billion by 2030.

Ozempic and Wegovy work by mimicking the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. (GLP stands for glucagon-like peptide.)

A recent survey in the US shows that nearly half of adults want to lose weight, and would be interested in taking a prescription drug to help them do so.

An estimated 42% of the American population meanwhile is classified as obese.

Best and worst performing ASX biotechs over the past month

Swipe or scroll to reveal the full table. Click headings to sort.

BCAL Diagnostics (ASX:BDX)

BCAL was the best biotech performer over the past month after announcing breakthrough results from its Precion clinical study in the US.

Results showed that BCAL’s breast cancer diagnostic test achieved an impressive sensitivity of 90%, and a specificity of 85.5%. These results were consistent with the findings of earlier studies conducted in Australia using a different mass spectrometry platform.

BCAL says the replication of these results is a major breakthrough in the path to commercialisation of the BCAL test, with sales expected to commence in the second half of calendar 2024.

Lumos Diagnostics (ASX:LDX)

Lumos surged after announcing that a core patent covering the camera technology used in its reader platform has been granted for Europe and Japan.

The patent, called “Device for reading an IVD assay”, covers the use of Lumos’ proprietary camera technology which is incorporated in many of its readers.

These readers have become a critical component of new point-of-care tests as they automate the reading and quantification of results, which in turn allows them to be seamlessly integrated into electronic medical record systems.

The latest patent covers the use of Lumos’ reader technology in the European and Japanese markets until 2036. The technology has already been granted in the United States and Australia.

Adherium (ASX:ADR)

Adherium rose after signing a collaboration agreement with US-based Allergy Partners for asthma management to serve its more than 300,000 patients across 130 sites in 20 states.

Adherium’s Hailie provides real-time data for patient feedback for self-management, and enables doctors to bill remote patients to generate repeat, multi-year revenues.

Initial roll out is for three states, with new employee training starting this month and expansion to more states to follow this calendar year.

Alterity Therapeutics (ASX:ATH)

The neurodegenerative diseases specialist received a $4.74 million cash refund from the Australian Taxation Office for its R&D activities.

The company says the funds will be used to further Alterity’s clinical research activities, including the ongoing Phase 2 clinical trials for its lead drug candidate ATH434 in Multiple System Atrophy (MSA), a Parkinsonian disorder with no approved therapy.

Rhinomed (ASX:RNO)

The wearable nasal and respiratory technology company has received a Notice of Allowance from the US Patent Office relating to the company’s Mute nasal dilator technology.

This application was filed in December 2016, and the approval will now provide further protection to Rhinomed’s family of medical devices which deliver improved sleep, less snoring and better breathing during sleep and aerobic activity.

In the US, Mute is currently sold through leading drug store and grocery chains including Walgreens, CVS, Rite Aid, Ingles Markets and online through Amazon.

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