DNA Helix
that Alphabet (GOOGL) The unit used artificial intelligence to disrupt the way new drugs are discovered. This is the best way for investors to take advantage of it.
DeepMind announced on July 28 the availability of a database of nearly all proteins known to science. The open source project eliminates one of the more expensive parts of biotechnology.
Investors should consider buying ARK Genomic Revolution ETF (ARKG).
DeepMind rose to prominence last December when the AlphaFold Project solved a 50-year biological problem. The London, UK-based company has used artificial intelligence algorithms to successfully predict the 3D shapes that proteins will take as they bend organically. It was a huge advance in biotechnology.
The forms that proteins take ultimately determine their function.
If biologists know the shapes/functions in advance, they can design custom chains of amino acids in the lab, then quickly develop drug therapies for testing. Prior to AlphaFold, the determination of protein structures was experimental. When possible, researchers had to crystallize the protein, then use electron microscopes or X-ray crystallography machines to make informed guesses. The process was expensive and imprecise.
During a podcast in July, DeepMind CEO Demis Hassabis told Lex Friedman that determining the structure of one of the proteins used in his Ph.D. Student 4-6 years to complete. AlphaFold can process this information in a matter of seconds. Hassabis claims that the new database will make finding the structure of 200 million proteins as easy as doing a Google search.
drug discovery trends He notes that researchers at Oxford University used the findings to develop a rapid malaria vaccine.
While accelerating drug discovery is a game-changing factor for biotech companies, investors should focus on how the database will change the narrative around investing in the sector.
Biotech stock prices soared in 2019 and 2020 as investors comforted the idea that anything was possible. They saw advances in data science and computation as the beginning of something really big.
Researchers at Gartner Group (IT) In 1995 he coined the phrase hype cycle. The basic premise is that new technologies typically follow five distinct stages; Trigger peak bloated expectations. The basin of disappointment is the slope of enlightenment. and productivity plateau.
During the startup phase, media interest grows despite the lack of commercially viable products. Investors have become very optimistic. Stock prices are skyrocketing, as they did in 2020 based on the promise of innovation. This stage is always followed by the height of expectations and disappointment.
In my opinion, the biotech sector has passed the disappointment phase. The next stage, with real products begins now. Investors should prepare
The Ark Genomic Revolution ETF owns 60 stocks poised to benefit from this paradigm shift.
Ark Genomic is run by Cathy Wood, a polarizing figure in the financial world. She announced Ark Invest in 2014 after her idea of โโinvesting in disruptive technology was deemed too risky for Alliance Bernstein, her former employer. By early 2021, she became an investment star, and was named the best stock picker Bloomberg.
Ark Genomic stock price went from $35 in early 2020 to $114 a year later. That's when biotech stocks in general entered the height of inflated expectations, followed by a phase of disappointment. Ark Genomic shares traded in June as low as just $27.
AlphaFold is a fundamental innovation. The sector is entering the cliff of enlightenment as the first generation products begin to spread. The success of Oxford University and others will follow. Buying a basket of companies, such as Ark Genomic is the best way to take advantage of these new products while diversifying the risks.
The stock is currently trading at $40.39, however it could easily fetch $47, then $70 over the next 18 months, representing a gain of 17.5% and 75%, respectively.
A decade ago, no biologist was about to solve the protein folding problem. A company owned by an Internet search engine has quietly changed science. It's time for investors to reap the rewards.
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