New genes for you?

The idea behind gene and cell therapy is to introduce organic material into a body that needs help.  Bone marrow transplants, also known as stem cell transplants, infuse either your own stem cells (autologous) or someone else’s stem cells (allogeneic) into your body.  This is done when your bone marrow no longer produces healthy blood cells, often a result of cancer treatments (chemotherapy).  Stem cell infusion enables the body to once again produce healthy blood cells.

Stem cell therapy is well established in mainstream medicine.  However, gene therapy has lagged behind, as the research is difficult, and one infamous human test failed badly, ending in the death of the patient.  The idea with gene therapy is to introduce a healthy gene into the body, replacing all of the unhealthy genes, such as the gene that causes Cystic Fibrosis.  The idea is sound in that we can now positively identify problem genes and we can identify and isolate good genes to replace them with.  The really difficult part is finding a safe and effective way to get the good gene into the body; that’s where viruses come in, as viruses can be used to carry the good genes into the body.  Finding a safe and effective virus has been the challenge for several years, as many viruses, even when used as just a carrier of a good gene, can be rejected by the body and cause severe problems, even death.

The original virus used as a gene carrier was “adenovirus”, which elicited problematic immune responses in humans.  However, the research moved on to “adeno-associated” virus (AAV), trying to reduce immune system responses.  Researchers isolated over 120 AAV variants and eventually settled on AAV9 as the best of breed.  This is the variant used in gene therapies today – all of this after about 20 years of development and testing.

Gene therapy is finally ready to enter the medical mainstream and it will attempt to tackle many conditions that have had no effective treatment until now. There are over 900 companies, large and small, developing new cell and gene therapies.  In the USA the Food and Drug Administration (FDA) has reported a sharp increase in “Investigational New Drug” (IND) applications, all of which have to do with cell and gene therapy treatments.  IND’s are an early step in gaining market approval in the USA.  Here is the press release from the FDA: 

“We anticipate that by 2020, we will be receiving more than 200 [cell- and gene-therapy] INDs per year, building upon our total of more than 800 active cell-based or directly administered gene therapy INDs currently on file with the FDA. And by 2025, we predict that the FDA will be approving 10 to 20 cell- and gene-therapy products a year based on an assessment of the current pipeline and the clinical success rates of these products.”

A big challenge for all of these bio-tech firms is to have enough raw materials for the development and testing of new treatments, so ramping up manufacturing needs to happen very soon.  It is clear that the science is sound and the demand is here, so it is important to keep an eye on those companies that will have the capacity to provide materials like AAV9 in the quantities required.

These groundbreaking changes in medical treatments are disruptive in nature and should present solid investment opportunities.

TREND DISRUPTORS is monitoring these developments, and identifies investment opportunities that will lead to success for all well informed investors.

Note: Premium subscribers were just sent a new recommendation in this sector that we feel is in an excellent position to benefit from a major biotech boom.

Stay tuned!

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Where is the euphoria?

In December each year Timer Digest asks investment newsletter editors to make their predictions for the following year. In December when we were asked to make our predictions the stock market was coming off its biggest correction since 2008.

Our December forecast surprised many, as there was a lot of doom and gloom at the time. Here are our answers to their questions:

  1. In your view, will 2019 be a Bull or a Bear market? Bull
  2. What is your S&P 500 (target range) forecast for the 1st quarter, 2019? 2500-2830. Actual = 2834
  3. What is your S&P 500 forecast for mid-year, 2019? 2830-3020. Actual = 2964
  4. What is your S&P 500 forecast for year-end 2019? 2940-3300. Actual = TBD

Last week the S&P 500, Dow Jones Industrial Average and the NASDAQ Composite Index all set new all-time highs. The S&P 500 is trading above its 10-year uptrend channel, which is very bullish!

Yet despite these record highs, according to Goldman Sachs, US equity funds have seen an outflow of over $100 billion so far in 2019. Meanwhile, more than $350 billion of inflows have poured into bonds, while more than $430 billion moved into cash.

With equity markets setting new all-time highs, the American Association of Individual Investors (AAII) bullish sentiment is at 34%, 4% lower than the historical average of 38%.

Over the last 10 years this bull market has been the most hated bull market in history. There have been so many negative concerns: US-China trade war, Brexit unknowns, Iran conflict, impeachment, you name it, there have been plenty of reasons to be scared.

Fear is keeping the masses out of the equity markets and they have missed out on this bull market.  Despite all the fears in the world, stocks have continued to march higher.  These investors have missed out on the longest bull market in history.

But we need to understand that bull markets do not peak when investors are scared, they typically peak when everyone is bullish, even euphoric, because that’s when there is no one left to buy.

What typically happens is that the masses who have not been in the markets start to get the Fear Of Missing Out (FOMO). Just look at what happened during the run-ups to the 2000 and 2007 market peaks. Investors threw caution to the wind; they were buying with no fear of a major downturn.

In the 2000 tech market bubble, the NASDAQ climbed 237% from October 1998 to February 2000. But the final four months of the bull market saw the NASDAQ spike almost 85%.

While we are not expecting that level of euphoria here, we should see FOMO kick in, and the masses rushing in trying to be a part of the party. The masses are always wrong, and buy right at the top, and that has not happened yet. This tells us, despite all the reasons to be nervous, we are not yet at the peak of this market.

Looking at the markets today we can see that the S&P 500 just set a new all-time high, but  if we look at the bottom of following chart, based on the Relative Strength Index (RSI), the S&P 500 is also close to being overbought in the short-term. This suggests we could see a pullback soon, and that could be a buying opportunity.

Once the masses get on board, we will be looking to get out because there will be no buyers left, and the top will be in.

Stay tuned!