The Wealth of Health

This newsletter now carries a new name, Artha, officially representing Artha Investments LLC. Rooted in Sanskrit, Artha symbolizes meaningful wealth — resources that enrich and empower life. This name reflects the core vision and future objectives of this venture. I invite you to continue reading, sharing and investing with purpose and insight. Visit the new website at www.arthainvestor.com. 

Our Health

Good health is a valuable asset. As the adage goes, "health is wealth." While the business of health depends on addressing the risks of poor health, its primary goal is to prevent and mitigate the effects of disease, helping people live well. This, in turn, is a crucial lever for improving health, strengthening productivity and growing the economy. 

On a recent television show, the CEO of Benchling, a software company that assists in the research and development of novel drugs, highlighted the stagnant state of drug discovery: In 2024, the FDA approved roughly 50 drugs, a number that has remained fairly consistent over the past decade. He believes this number should be around 500 per year, given our advancements in understanding human biology and the use of artificial intelligence and machine learning. 

Noteworthy Developments of New Therapies 

Despite the annual number of drug approvals remaining relatively static, there have been noteworthy developments of new therapies, particularly cell and gene therapies.  

Source: Federal Drug Administration

Cell therapies, including CAR-T, involve modifying or selecting cells (often the patient's own cells or donor cells) to fight diseases, particularly cancers and some inherited disorders. CAR-T therapies currently represent the highest number of approved cell and gene therapies by the FDA. 

Gene therapies involve introducing, removing or altering genetic material within a patient's cells to correct or compensate for a defective gene. This category includes products that directly introduce genetic material into cells or modify or add a functional copy of a gene to compensate for a defective or missing gene. Examples include therapies for inherited retinal diseases, spinal muscular atrophy and hemophilia. In 2023, Casgevy became the first FDA-approved therapy using CRISPR, a type of genome editing technology. 

mRNA and ASO

Two other types of novel therapies that work through DNA translation — creating proteins using genetic information from DNA — are mRNA vaccines and antisense oligonucleotides (ASOs). Most of us became familiar with mRNA vaccines during the COVID-19 pandemic, when the approval of the first mRNA-based vaccines marked a scientific turning point and established mRNA as a versatile and flexible technology. 

Similarly, ASOs are synthetic DNA molecules designed to target and bind to specific genes to produce, alter or silence proteins. They can be used to treat various conditions, including age-related macular degeneration, Duchenne muscular dystrophy and spinal muscular atrophy. 

BioPharma Trends 

Oncology, respiratory and infectious diseases are forecast to be among the top 10 therapy areas by 2028, based on global spending. Approximately a quarter of oncology trials now focus on novel mechanisms, particularly antibody-drug conjugates, multi-specific antibodies, and cell and gene therapies. 

source: GSK Annual Report

Artificial Intelligence in aid of Drug Discovery 

Many new therapies aim to produce, alter or inhibit specific proteins, which is a complex and risky process. It involves not only prompting genes to produce a specific protein, but also predicting the complex structure of proteins and their interactions with other molecules. This is one area where technology, and especially artificial intelligence, can accelerate the discovery process.  

For example, in 2024, Google DeepMind scientists Demis Hassabis and John Jumper won the Nobel Prize in Chemistry for their work on protein structure prediction. AlphaFold, a Google company, uses an AI model for protein prediction and claims to have 200 million protein structures in its database, saving months or even years of research time. Considering a typical drug discovery cycle is 10-15 years, and patent protection lasts 20 years, the economic implications are significant. 

 Source: Google Deepmind

An AlphaFold-generated model of Q8I3H7, a protein that may protect the malaria parasite against immune system attack. Blue areas are predicted with high confidence; yellow and orange areas are predicted with lower confidence.

Acquisitions and Partnerships 

The drug industry's increased focus on cell and gene therapy is evident in recent acquisitions and partnerships. Although the current health policy environment is uncertain, the Federal Trade Commission could be more friendly to mergers and acquisitions. Innovation, productivity improvements and new technologies should thrive. After all, FDA funding is partly driven by fees from the biopharma industry.  

Investment opportunities in innovative therapies extend beyond biotech companies to include funding companies, device manufacturers and technology companies. 

An Investment in Health Is an Investment in the Future 

In an era of increasing life expectancy and changing demographics, healthcare systems and economies face growing pressures. Investing in prevention, diagnostics and innovative therapies is an investment in the future. By supporting people to live healthier lives, we can ease pressure on health systems and promote economic prosperity.