The ARK Genomic Revolution Multi-Sector Fund (ARKG ) is establishing a reputation for being one of the best-performing healthcare ETFs, a legacy forged over its multi-year lifespan, not just a few weeks.
One of the driving forces behind ARKG’s enviable long-term track records its the manager’s ability to identify disruptive forces in the healthcare and genomics arenas. The intersection of precision medicine and genomics could be the next growth frontier for ARKG investors.
“Increasingly, clinicians are tailoring treatments to a patient’s specific genetic mutations,” said ARK analyst Simon Barnett in a recent note. “While the number of precision therapies targeting these mutations has grown, only recently have costs dropped to a low enough level that physicians can sequence an individual’s genomic profile and identify his or her mutations.”
ARKG includes companies that merge healthcare with technology and capitalize on the revolution in genomic sequencing. These companies try to better understand how biological information is collected, processed and applied by reducing guesswork and enhancing precision; restructuring health care, agriculture, pharmaceuticals, and enhancing our quality of life.
“Empowered by the cost declines of next generation DNA sequencing (NGS), diagnostic providers such as Veracyte (VCYT), Exact Sciences (EXAS), and Guardant Health (GH) are advancing personalized medicine by matching patients to precision therapies. ARK believes that therapeutics companies increasingly will use NGS in clinical trials, creating targeted therapies that ultimately will supplant traditional chemotherapies,” writes Barnett.
Guardant Health and Veracyte combine for almost 6% of ARKG’s roster.
Bolstering the long-term case for genetic sequencing is the field’s ability to help healthcare professionals more accurately diagnose ailments, delivering a higher level of personalized patient care.
In the lucrative oncology field, a prime target for many genomics companies, there are myriad ways genomics and precision medicine can combine to potentially increase positive outcomes for patients.
“Some mutations are not inherited and can appear spontaneously, giving rise to aggressive cells that coalesce into tumors. In the case of spontaneous variants, cancer patients are matched to targeted therapies with a lock-and-key system,” according to Barnett. “First, using molecular diagnostic tests, oncologists search for the mutation—the lock—that is driving tumor growth. Then, diagnostic vendors introduce the molecular information to a genomic biomarker database and search for the best treatment—the key. Importantly, as the data on clinical outcomes feeds back into the system, the accuracy of the algorithms that match patients to therapies increases continuously.”