Season 4, Post 28: The $100 genome

Science is marvellous, particularly to a layperson, such as your author. Little can be more important than understanding life. Consider the Human Genome Project, the world’s largest collaborative biological endeavour. The idea behind it, for those unfamiliar, was to identify, map and sequence all the genes of the human genome from both a physical and functional standpoint. The project was formally launched in 1990 and by 2003 the project was deemed complete. The estimated cost for generating the first human genome was $2.7bn.

We are believers in progress and have seen the dynamics of Moore’s Law play out across many industries. Costs of gene sequencing have come down as the enabling technology has improved and the benefits of scale have kicked in. Nonetheless, we were excited to read that the first $100 genome was delivered recently. Backed by data from over 200 whole human genomes generated at the Broad Institute of MIT and Harvard, Ultima Genomics (a private business) claims that its sequencing platform can deliver $100 genomes at scale.

The implications are considerable. We initially made the case for molecular diagnostics in 2012 (at the time, sequencing the genome cost ~$50,000). Think of the potential that cost-effective DNA sequencing could unleash, in terms not only of more personalised medicine but also by shifting the whole healthcare paradigm from reactive to pre-emptive treatment. Understand the human genome better and there is also the scope to treat rarer diseases. Further, if we can fully interpret human DNA, then why not that of animals too, with the idea of making potentially better food products?  

Many businesses, not just Ultima, stand to benefit from such scientific progress. By way of example, one of the most intriguing companies we met on our recent US company trip was Gingko Bioworks. Although founded in 2009, Gingko was only listed in April 2021. The business describes itself as a “cell programming platform”, which uses biology – or DNA – to solve problems for businesses spanning the food, materials, and therapeutics industries. Gingko believes that it has penetrated less than 1% of its available market opportunity. Back to Ultima and when asked about its potential, the Director of Genomics at Stanford University, Michael Snyder, believes the platform will “transform diagnostics and disease risk prediction.”

14 July 2022 ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise .​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

Alex Gunz, Fund Manager