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Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
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Intellia’s gene editing breakthrough is historic
Peter Garnry
Chief Investment Strategist
Summary: Intellia Therapeutics' share price rose 50% yesterday as the biotechnology company showed promising results against a rare genetic liver disease. The gene editing technology is one of the most promising technology within disease treatments and the key to unlock the full potential of adaptive cell therapies.
Back in January we launched our NextGen Medicine theme basket consisting of 30 companies within what we call the frontier of biotechnology. There is the mature biotechnology industry, which is closer to the old pharmaceutical industry, and then there is this new frontier of biotechnology companies working antibody therapies, gene editing, T-cell therapy, immunology, mRNA technology and genetic diagnostics.
Over the weekend, Intellia Therapeutics and Regeneron Pharmaceuticals (part of the mature biotechnology industry) released a landmark phase 1 clinical data showing significant reduction in disease-causing protein following CRISPR therapy for Transthyretin (ATTR) Amyloidosis. Experts have called this a major breakthrough for the promising gene editing technology CRISPR, pioneered by the two female scientists Charpentier and Doudna which won them the Nobel Prize in Chemistry, which is necessary to increase the potential of adoptive cell therapy (ACT). The news lifted Intellia’s share price by 50% yesterday and our NextGen Medicine basket by 3.9% showing how Intellia’s result is lifting the outlook for many of these new emerging biotechnology companies within these new technologies.
The table below shows the 30 companies in our NextGen Medicine basket and provide a broad-based exposure to this part of the biotechnology industry. It is our expectation that the biggest breakthroughs in medicine over the coming decades will come from this part of industry. Some of the other gene editing companies in the list are CRISPR Therapeutics, Beam Therapeutics, Editas Medicine and PTC Therapeutics.
| Name | Domicile | Mkt cap in USD mn | R&D in % | 12M Rev in USD mn | Burn rate | Insti % |
| Illumina Inc | US | 70,299 | 1.0 | 3,473 | NM | 99.7 |
| Moderna Inc | US | 89,517 | 1.9 | 2,732 | NM | 58.3 |
| Seagen Inc | US | 29,236 | 2.9 | 2,273 | NM | 106.4 |
| Genmab A/S | DK | 27,338 | 1.9 | 1,693 | NM | 64.6 |
| Exact Sciences Corp | US | 22,475 | 2.8 | 1,546 | NM | 102.3 |
| BioNTech SE | DE | 54,547 | 1.4 | 551 | 16.3 | NA |
| Grifols SA | ES | 16,167 | 2.2 | 6,105 | NM | 62.9 |
| CRISPR Therapeutics AG (**) | CH | 11,489 | 2.6 | 1 | 5.5 | 70.5 |
| Argenx SE | NL | 16,177 | 1.6 | 42 | 5.1 | 59.8 |
| Mirati Therapeutics Inc | US | 8,861 | 3.7 | 13 | 4.2 | 114.9 |
| Fate Therapeutics Inc | US | 8,380 | 1.5 | 40 | 10.2 | 110.2 |
| Natera Inc | US | 10,257 | 1.2 | 449 | 3.0 | 115.1 |
| Invitae Corp | US | 6,888 | 3.9 | 319 | 1.0 | 101.3 |
| Ultragenyx Pharmaceutical Inc | US | 6,505 | 6.9 | 334 | 2.9 | 132.2 |
| Twist Bioscience Corp | US | 6,177 | 0.8 | 113 | 2.5 | 126.1 |
| Denali Therapeutics Inc | US | 9,095 | 2.4 | 340 | NM | 102.1 |
| Arrowhead Pharmaceuticals Inc | US | 8,974 | 1.8 | 89 | NM | 74.1 |
| Iovance Biotherapeutics Inc | US | 4,116 | 4.9 | 0 | 2.4 | 127.3 |
| Pacific Biosciences of California Inc | US | 7,010 | 1.0 | 92 | 4.0 | 91.8 |
| Galapagos NV | BE | 4,666 | 13.4 | 639 | 10.3 | 45.6 |
| Beam Therapeutics Inc | US | 6,812 | 4.0 | 0 | 2.3 | 106.8 |
| Swedish Orphan Biovitrum AB | SE | 5,533 | 3.5 | 1,612 | NM | 107.9 |
| Sage Therapeutics Inc | US | 3,345 | 8.6 | 1,113 | NM | 119.8 |
| Abcam PLC | GB | 4,485 | 1.2 | 346 | NM | 89.3 |
| Intellia Therapeutics Inc | US | 9,094 | 1.7 | 52 | 8.7 | 109.3 |
| Editas Medicine Inc | US | 2,988 | 5.5 | 92 | 2.2 | 87.1 |
| PTC Therapeutics Inc | US | 3,067 | 17.0 | 430 | 4.8 | 124.2 |
| Allogene Therapeutics Inc | US | 3,616 | 5.7 | 38 | 4.5 | 125.7 |
| CareDx Inc | US | 4,951 | 1.1 | 221 | 59.1 | 110.5 |
| MorphoSys AG | DE | 2,662 | 6.7 | 144 | 5.3 | 75.2 |
Source: Bloomberg and Saxo Group
Table explanations: R&D in % is the 12-month R&D expense in % of market cap, Burn rate is the number of years the company can sustain current negative free cash flow (NM means not measurable and is used for those with positive free cash flow), Insti % is the institutional ownership of the floating shares (those that are tradeable, so if all shares are not publicly available then the ratio can be above 100%) in %.
** Peter Garnry has holdings in these companies
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