The Investment Opportunity Behind AI’s Life-Saving Powers

Michael Robinson

Tuesday, October 31, 2023

Think Artificial Intelligence (“AI”) can’t save your life? Consider this:

In a recent study of genetic codes, a team of humans identified about 80,000 variations that could either cause disease or were benign. That was 2% out of roughly four million variations studied.

At the same time, an AI model analyzed a list of 216 million possible variations and discovered a whopping 71 million genetic mutations that could potentially cause disease.

This comparison is meant to illustrate an important point: Despite their best efforts and intentions, humans are no match for AI in a number of fields, including biotech research.

That’s alright, though. We can still find ways to profit from this trend...

Brick by Brick

There are a lot of cells in your body — an estimated 30 trillion, in fact.

Cells produce proteins, combinations of amino acids made to the exact recipe found in each cell’s DNA. And these proteins do all the things that a cell needs, from transporting substances to signaling other cells.

The thing is, many diseases happen when the recipe for proteins stored in your DNA gets corrupted in a way that changes the function of a protein.

The process can be a bit like randomly changing a single brick in a building. Chances are, it won’t matter. The general shape of the building and its structural integrity will stay the same.

But change the keystone at the top of an arch, or a load-bearing brick, and the whole structure is at risk of tumbling down.

DNA and proteins are similar in nature. Many DNA changes have no impact at all on resulting proteins. But other changes alter the protein, creating a mutation that can have a significant impact on your health. For example...

Deadly Mutations

A single misshapen protein can slowly kill the brains of those with Huntington’s disease. It can also cause the lungs and liver of someone with cystic fibrosis to clog up, or change the shape of red blood cells in those with sickle-cell disease.

Other, less obvious conditions are also impacted by misshapen proteins. High cholesterol, high blood pressure, diabetes, dementia, and many cancers are much more likely in people with mutations in specific proteins.

What’s needed is to fix these mutations to prevent or correct the disease. And that’s where gene therapy enters the picture...

All About Gene Therapy

Gene therapy is an emerging biotech sector. According to Mordor Intelligence, it’s already a $5.6 billion market. And by 2028, it’ll reach nearly $20 billion.

How does this application work?

Essentially, gene therapy solves the problem of misshapen genetic code at its source by fixing the mutation that causes the proteins in question to be produced with the wrong parts.

For a long time, the idea seemed like science fiction. But the first gene therapy was approved by the Food and Drug Administration (“FDA”) in 2017. Since then, seven more gene therapies have hit the market.

Early on, fixing only the precise bit of DNA in need of repair was a challenge. But that has since been overcome. The next hurdle is conquering murkier conditions, mutations where scientists can identify a genetic component, but have a hard time spotting a specific mutation that’s causing the disease. Heart disease and dementia are two examples of diseases that stem from this type of mutation.

This is where AI can play a key role. Here’s how...

Doing What Humans Can’t

There more than 100,000 proteins in a single human cell. And more than three billion DNA base pairs that encode them all.

Simply put, there’s too much for humans to analyze and discover...

Especially when some diseases are caused not by a single protein ceasing to work, but by the complex interplay of several proteins together.

Finding new mutations to target with gene therapy is laborious work for humans, but not for AI.

That’s why as gene therapy emerges, I want to target AI-related biotech firms like Novartis (NYSE: NVS)

This drug giant helped pioneer the gene-therapy field a decade ago. And it has a specialized manufacturing facility focused on producing gene-therapy compounds. It even has a partnership with Microsoft (MSFT) to use AI for drug discovery, including those based on the understanding of the role genes play in diseases.

Notably, Novartis is on the road to higher profits, which should lead to a higher stock price. The company is on track to grow earnings per share by about 50% this year. And over the past year, its stock has climbed more than 16%. For reference, the S&P 500 during that time is up only about 6%.

There’s no doubt AI will play a meaningful role in identifying and potentially preventing genetic diseases. And its companies like Novartis — and investors like you — that could reap the financial rewards from its involvement.

Cheers and Good Investing,

Chief Investment Officer
Trend Trader Daily

Tags: ai gene-therapy