Skip to main content

Baillie Gifford Considers How The Pandemic Is Revealing The Future Of Healthcare

Partner Content provided by WM Nexus

New techniques and technologies have had a huge impact on the world’s pandemic response and will continue to transform health care in the next decade.

The ongoing pandemic has taken a terrible toll but technologies such as gene sequencing have saved huge amounts of time and cost particularly in the drive for vaccines said Marina Record, investment manager with the Health Innovation Fund, Baillie Gifford.

Record, speaking at a recent WM Nexus virtual round table event, said the entire spectrum of healthcare is changing as it moves to treat not just symptoms, but the molecular and genetic causes of diseases enabling preventions and cures.

A huge range of technologies including gene sequencing, machine learning, powerful imaging sensors and gene and cell therapy have moved from laboratories and into everyday healthcare in the last decade.

The firms delivering these solutions offer sustained long-term growth while many of the new techniques mean more efficient deployment and reinvestment of capital and lower risks.

The pandemic has offered an historically unprecedented proof of concept with the promise of future transformations to come.

The clearest example is with the early mapping of the SARS-CoV 2 genome using techniques pioneered by US gene-sequencing firm Illumina.

The shift has been profound.

The first human genome took 13 years to sequence and cost $3 billion. Today, it takes less than an hour and $500. It could soon fall to $100.

She said: “Illumina made gene sequencing accessible to virtually any scientist by dramatically reducing its cost.

“The genome helped us understand where the virus came from, how we can diagnose it, and powered the search for drugs and vaccines. And because sequencing is available around the world, it has also enabled us to track how the virus spreads and evolves. So, with gene sequencing, we're getting better and faster at studying and diagnosing diseases.”

It is not just Covid-19 – it is also helping with cancer and heart disease and even mental health. She said we are beginning to understand “an entire cascade of biochemical processes that contribute to health and disease”.

The Illumina example illustrates a broader trend of convergence of technologies from the expensive and relatively rare stage of development to affordable and pervasive.

Another US firm 10x Genomics is producing tools to investigate this cascade to the level of a single cell. Once again, the dramatic reduction in the costs of these tools driven by 10x is unleashing a new wave of discoveries.

For example, scientists have discovered a rare cell type in the lung has a role in cystic fibrosis. “This transformed their understanding of a disease that we thought we knew a lot about. It transformed their understanding of the disease overnight.”

These skills are now being used by biotechnology firms to create new drugs and other treatments.

“The ultimate ambition is for most diseases to be diagnosed and treated based on readings from an individual. That is personalised medicine, and it opens up pathways to many more cures.”

“They are transforming how we study diseases, how we develop medicine, how we diagnose and how we prescribe treatments. They are building the infrastructure for the future of healthcare, and the scale of the opportunity is virtually open ended.”

She said that these firms will prove to be outliers in terms of transforming society and offering sustainable growth.

Drug discovery is also accelerating with the vaccines providing a clear illustration of a dramatic shift in development time. In recent history, developing a vaccine, could take 15 years. Moderna had a vaccine to trial by 12 January 2020 a matter of days after the publication of the genome.

“These technologies have significant advantages in the speed of development, and manufacturing, compared to traditional approaches,” she said.

It was this transformative technology that saw Baillie Gifford invest in Moderna at IPO following engagement with the firm from around two years prior to their listing.

“Moderna captured our imagination for its potential to rapidly discover and develop new drugs. The technology is based on a molecule called messenger RNA that carries instructions for making proteins in our bodies. That molecule can be programmed to deliver any protein using our bodies as factories for producing the drugs that we need. Now the challenge is to deliver this molecule to the right place in our bodies. But the beauty of the approach is that once Moderna can do it for one protein, it just needs to change the code to do it for another.”

“It stands out not just for the pace of innovation, but for its ability to create new drugs over and over again by simply changing the sequence in their vaccine.”

She said that most biotech companies essentially start from scratch with each new drug which stacks the odds against them, yet the new techniques have shifted the odds dramatically.

In a similar vein, Alnylam Pharmaceuticals has three drugs on the market and another likely to be approve soon.

Rather than producing a protein as with Moderna, this technology takes faulty proteins away by silencing faulty genes.

“The common theme between Moderna and Alnylam is that their drugs are based on the genetic code. And once these companies have figured out how to get a desired quantity of a drug to the target organ, they just need to change the code to engineer a new drug to target a different gene and disease. And this transforms the likelihood of success.”

To underline this point, Alnylam’s track record of success in clinical trials so far is 60%, six times higher than the industry average.

The final area of transformation is in the delivery of care away from traditional settings and once again the pandemic has brought something of a proof of concept.

“The sceptics were confounded last year, as telemedicine replaced virtually all medical appointments that don't need physical contact. And this shift has benefited the telehealth companies that we invest in, including Teladoc in the US and Ping An Good Doctor in China.”

She said: “Healthcare services are currently centralised around locations, because equipment and expertise are concentrated in hospitals and clinics. But as monitoring and diagnostic equipment gets smaller and smarter, location becomes less important and we will see more of these devices in our homes.”

This allows health care to become proactive and continuous – it is transforming the approach to diabetes, for example, with personal health coaching firms such as Livongo helping patients keep important health metrics within a desired range.

Dexcom’s glucose sensors can prompt doctors to adjust treatment when needed without waiting for the next routine appointment or an emergency. “The potential cost savings are huge. Diabetes is the most expensive disease globally where preventable complications account for two thirds of the total cost”, she added.

“The pandemic has accelerated the adoption of remote monitoring technologies to maintain social distancing. But ultimately, these technologies are changing the healthcare service that we receive. They are tailoring care to each individual and making healthcare more effective. In the long term, this has the potential to create tremendous value.

“This creates a powerful window of opportunity for new entrants to redefine the healthcare landscape in the coming decades. We are at the start of a transformation in healthcare that has the potential to unlock tremendous value for society and for investors.


© The Sortino Group Ltd

All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or scanning or otherwise, except under the terms of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency or other Reprographic Rights Organisation, without the written permission of the publisher. For more information about reprints from AlphaWeek, click here.