There’s no going back to normal.
My longtime readers already know this… but COVID-19 has changed our world forever.
It’s easy to spot some of the changes.
Many of us are working remotely. We’re shopping online. And we’re rethinking how to hold conferences and public gatherings.
But there are less obvious changes, too…
I’m a technologist. My beat is helping readers profit from breakthrough new tech. And one tech niche I’m particularly bullish on right now is biotech.
If you’d asked me 20 years ago whether I was excited about biotech, my answer would have been different.
But as I’ll show you today, we’re entering a renaissance in biotech.
Breakthroughs that were 5 to 10 years away before the pandemic… are now happening on a monthly or weekly basis.
It’s opened the doors for radically new ways to make vaccines and therapies. Many of these were not taken seriously before.
It’s going to help us cure diseases at a pace we’ve never seen before.
And for investors, it presents a once-in-a-generation opportunity to create enormous wealth.
More “Tech” Than “Bio”
When we picture biotechnology firms, we tend to think of scientists in white lab coats fiddling with test tubes and peering under microscopes.
But this story is far more interesting than that.
As I like to tell my readers, biotech is much more “tech” than “bio” these days.
Today, biotech firms are using big data, machine learning, and artificial intelligence (AI) to make discoveries that would have seemed impossible even just a few years ago.
Consider just one example from an early stage biotech firm called AbCellera. It’s based out of Vancouver, Canada. In March, it did something a lot of folks thought was impossible.
It got a blood sample from a patient who had recovered from COVID-19. It used AI to screen more than 5 million immune cells in that sample. And it identified about 500 antibodies that helped the patient fight the virus.
Finding these antibodies could be the key to treating COVID-19. AbCellera used this as a starting point to create an antibody therapy to potentially cure people with the disease.
Normally, this would take years. It took AbCellera just 11 days. Beyond incredible.
And the industry took notice…
Pharmaceutical giant Eli Lilly rushed to partner with AbCellera. They worked together on a treatment using these antibodies.
And earlier this month, AbCellera became the first company to send its COVID-19 antibody therapy to clinical trials.
If these trials go well, the U.S. Food and Drug Administration (FDA) will give AbCellera an “emergency use authorization.” That will allow the company to offer its therapy to the public by the fall.
That’s key because we will see a second wave of COVID-19 cases when the weather gets cool and dry again.
Let’s think about this for a minute…
An early stage biotech took blood samples and identified COVID-19 antibodies.
It then developed a therapy and launched clinical trials. And it did all this in the span of four months.
This is revolutionary work. In the decades I’ve been following the biotech industry, I’ve never seen this type of speed from it.
It’s thanks in large part to COVID-19. The pandemic has lit a fire under this overlooked industry. And it shows how scientists can apply breakthroughs in other technologies, such as AI, to the biotech industry in ways they haven’t before.
Investors are starting to notice…
The world has woken up to the potential of biotechnology.
Every venture capitalist (VC) and private equity firm has realized how powerful these technologies are and how quickly biotech can move.
In 2019, we saw record investment in the industry.
We’ll continue to see an acceleration in biotech investment, early stage companies, and IPOs (initial public offerings) going forward.
This is already a trend in motion.
Just over half of all IPOs this year have been biotech companies. Collectively, they’ve raised nearly $5 billion for drug development.
The 2020s will be the decade of biotech. This will be the first decade in which biotech firms harness the power of Moore’s Law (the roughly doubling of computing power every two years) and demonstrate exponential growth.
So as investors, we need to pay attention.
Think of it this way…
In early 2017, bitcoin was a mostly unknown, niche asset. That was just as mainstream investors were starting to get involved. It ran 2,000% higher versus the dollar that year.
I believe investors’ awareness and engagement in early stage biotech companies will rival that of the last cryptocurrency bull market.
Remember, early stage biotech companies are working on truly world-changing technology. How many cryptocurrency projects can say they’re curing disease?
We are at the start of a multiyear biotech bull market. Breakthroughs will continue to happen. Diseases – previously thought untreatable – will be cured.
And yes – fortunes will be made.
What Makes Biotech Stocks Soar
First, you need to understand what makes biotech stocks soar.
Early stage biotech companies tend to be development-stage companies.
They’re pre-product and pre-revenue. Although the companies may be getting some licensing or service revenues, they tend to be a long way from making money on their products.
So don’t confuse them with the broad technology market. It’s full of companies that generate revenue from product sales.
Typically, biotech stocks move higher for two reasons.
First, positive news in the industry concerning the specific area of biotech that the company is focused on. That tends to result in some kind of increase in stock price.
Second, progress toward clinical trials… or results from clinical trials.
That means investing in biotech stocks takes patience. But the resulting moves can be extraordinary. I’ve seen these stocks pop in value by triple digits over a matter of days when good news comes out.
One biotech I’ve been tracking closely is on the verge of curing a form of blindness. I’m not talking about blindness in mice. I’m talking about blindness in humans.
This company is using gene-editing technology to make blind people see again.
And it’s already treated the first patient in an FDA-sanctioned clinical trial.
We are weeks – maybe days – away from results from that trial coming out.
I expect this company’s stock price to soar hundreds of percent… maybe even 1,000%… after this news comes out.
And remember… We’re at the start of a multiyear bull market in best-in-breed biotech stocks.
We can now edit people’s genomes (their complete sets of DNA). And we’re able to combine that with new diagnostic technologies and advances in computer processing power, AI, and machine learning.
This is going to drive exponential innovation in the underlying technology… and therefore investment.
We saw record levels of private investment in the biotechnology sector in 2019. And there’s no wonder…
There’s almost nowhere else in the stock market where you have this pace of growth and innovation.
Editor, Exponential Tech Investor