How to Profit From the 100-Year Life

by Nicholas Vardy
Birthday-Cake-100

So, do you really want to live to be 100?

Dr. Lynda Grattan, a professor of management at London Business School and author of the best-seller The 100-Year Life, assumes that you do.

In a recent presentation to Harvard alumni in London, Grattan discussed the often unexpected financial challenges of living a long life.

The statistics surrounding longevity are remarkable.

Life expectancy has risen by nearly three months per year since 1840.

It continues to grow at a rate of two to three years every decade.

That means more than half of the babies born in the West since 2000 may reach their 100th birthdays.

This demographic tidal wave will change the way most of us live our lives.

The traditional three-stage approach - education, followed by work and then retirement at 65 - is on the verge of collapse. It will need to be restructured if people truly start living to 100.

The 100-Year-Old Elephant in the Room

Grattan focused on the economics and finances of living a 100-year life.

But she missed the elephant in the room...

The difference between "life span" and "health span."

Sure, a 100-year life span sounds great in theory...

But do you want to spend those extra decades of life physically disabled, wracked by dementia or as a financial burden to your family?

Living to 100 is worth it only if you also have an extended health span.

That's where the exciting new field of personalized medicine and the genomics revolution come in...

The 21st-Century World of Personalized Medicine

You may recall the popular TV series Mad Men set in New York City's Madison Avenue advertising world in the 1960s.

In one episode, when the main character - Don Draper - went for his annual physical, it was also a look back in time.

The doctor took his blood pressure, listened to his heart and told him to cut down on smoking.

The last time I went for an annual physical, a nurse checked my blood pressure and drew my blood.

A week later, I discussed the results with my doctor. He told me his primary job had become interpreting data gleaned from blood tests.

So, in many ways, 21st-century medicine is already personalized.

The Miracle of Genome Sequencing

Tailoring treatments to the specifics of your genetics through genome sequencing takes personalized medicine to another level.

In June 2000, then-President Bill Clinton announced the historic sequencing of the human genome. Congress had first funded the project 20 years earlier, and it had cost $2.7 billion.

Just seven years later, in 2017, genome sequencing giant Illumina announced that it would one day be able to sequence a human genome in less than an hour for $100.

As a result, analysts project that human genomic sequencing will grow at a 200% annual rate between now and 2023.

In a few short years, healthcare workers will sequence your DNA as routinely as they draw your blood.

How to Invest in the Genomic Revolution

As with any revolution, fortunes will be made and lost by investing in the right and wrong companies.

Bet on the right horse... and you'll make a fortune.

Bet on the wrong one... and you'll watch your hard-earned dollars go up in smoke.

That's because investing in stocks focused on the genomics revolution is not like investing in the ordinary stock market.

It's much more like investing in a venture capital fund.

And here's what an average venture capitalist expects his returns to look like:

  • Two investments out of 10 will fail outright.
  • Six will survive as the "living dead" and end up making little money.
  • And two winning investments will make up for the losses.

So if you invest directly in genomics-related companies, expect a high failure rate.

And understand that you are in for a wild ride.

Luckily, there is an alternative...

Enter the Genomic Revolution Multi-Sector ETF (NYSE: ARKG).

This ETF invests in 40 to 50 companies that focus on developing and harnessing the latest advancements in genomics.

Many of its holdings are early-stage biotech firms. These firms focus on everything from gene therapy to targeted therapeutics to molecular diagnostics to stem cells.

By investing in an ETF that spreads its bets far and wide across the genomics-related universe...

You are betting that a handful of big winners will help you profit from - and perhaps even fund - your own healthy 100-year life.

Good investing,

Nicholas

Thoughts on this article? Leave a comment below.

This Company Was Doing Genes Before It Was Cool

Over the past several years, there's been an explosion of interest in genealogical DNA testing from companies like Ancestry, 23andMe, MyHeritage and others. I gave my parents two such kits for Christmas, figuring there's no way I'm really as Italian as they've always claimed (I'm not... but I'm close).

To get your results, these "swab-at-home saliva kit" companies rely on technology developed by genome sequencing biotechs like Illumina (Nasdaq: ILMN). Earlier this month, Chief Income Strategist Marc Lichtenfeld discussed Sangamo Therapeutics (Nasdaq: SGMO), a biotech taking gene editing to the next level.

Over the past year or so, gene editing has become one of the most talked about advances in medicine - thanks to CRISPR technology.

But before there was CRISPR, there was something called zinc finger technology, which, similarly to CRISPR, acts sort of like scissors for a DNA strand and enables scientists to edit a gene.

Sangamo Therapeutics (Nasdaq: SGMO) has been using zinc finger technology since the company started in 1995. It was the first company to conduct gene editing.

In November, it became the first company to attempt to edit a gene inside the human body when it infused gene editing tools into a patient with Hunter syndrome - a rare disorder caused by a missing gene that makes an enzyme needed to break down carbohydrates. Patients have all kinds of serious conditions as a result, including eye problems, bone issues and conditions affecting the brain.

The company has drugs in six clinical trials.

Its lead candidate is SB-525 in hemophilia A. The drug is partnered with Pfizer (NYSE: PFE) and is currently in Phase 1/2 trials.

SB-FIX is also in Phase 1/2 in hemophilia B. SB-318 and SB-913 are being studied in rare diseases MPS I and MPS II. SB-728 is in two different Phase 2 trials in HIV.

The company recently signed another deal with Pfizer, which paid it $12 million upfront. Sangamo will develop gene therapies for ALS (Lou Gehrig's disease) and frontotemporal lobar degeneration, which causes a decline in brain function.

Sangamo will develop the therapies and Pfizer will cover the research costs. There are no cures for either disease.

The company has plenty of cash - enough to last at least two years - so we shouldn't have to worry about any dilution in the near term.

Sangamo will have clinical trial data coming out on at least four of its programs by the end of June.

We'll see data from SB-525 and SB-FIX in hemophilia, SB-318 in MPS I, and SB-913 in MPS II. So there are quite a few potential catalysts over the next several months.

Additionally, the company will report quarterly results around February 28. Since Sangamo doesn't yet have any products on the market, the financial results aren't as important. But if the company provides any updates on its pipeline, that could move the stock as well.

There's a lot of buzz in the biotech space about gene editing right now. Getting into Sangamo is a way to play one of the oldest gene editing companies in the market with the most advanced pipeline.

- Donna DiVenuto-Ball with Marc Lichtenfeld

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