Decoding the mysteries in the human DNA and genomic sequencing was a far-fetched idea just a decade ago. Not to forget, it took 13 years and an investment of more than $3 billion for the first human genomic sequencing.
But now, a genome can be sequenced in just a couple of days, which costs lesser than the latest iPhone (Healthcare IT News). Analysts believe that growing demand for personalized medicine, solid investments and rise in research activities have propelled growth.
Buoyed by these trends, Genomics has received a warm response from the MedTech investment space within healthcare. Per Markets and Markets, the global Genomics market, which was worth $13.45 billion in 2016, is expected to reach $23.88 billion by 2022 at a CAGR of 10.2%.
In fact, the Zacks Medical - Biomedical And Genetics industry rose 2.2% in a month’s time compared with the S&P 500 index's return of 0.3%. So here we discuss about how Genomics has been creating opportunities in MedTech for investors who are keen on putting their money in the healthcare space for solid gains.
Favorable Trends Drive Genomics Markets
The global Genomics markets have been favored by a streak of solid developments in sequencing, microarray, PCR (Polymerase Chain Reaction), Nucleic acid extraction and Purification techniques.
Further, the implications of Artificial Intelligence (AI), cloud-based technologies and increased R&D focus have provided the companies with significant exposure to Genomics and lent a competitive edge in the MedTech space of late.
With ‘gene editing’ and synthetic DNA production already in vogue, we are not very far from the era where gene can be customized per requirement. A research report by the techcrunch suggests that a highly advanced CRISPR technology is capable of splicing and editing genes in lung cancer and leukemia.
In this regard, Pacific Biosciences of California’s (PACB - Free Report) Single-Molecule Real-Time (SMRT) sequencing technology deserves a mention. This technology helps scientists observe the DNA synthesis in real time by harnessing the natural process of replication started by the enzyme DNA polymerase. This leading Medical-Instrument company has a strong exposure to genomics and carries a Zacks Rank 3 (Hold). Pacific Biosciences’ flagship platform — the Sequel system — has been fortifying the company’s international footprint. The system is a nucleic acid sequencing platform based on SMRT technology.
Three other companies are also poised to gain from the rising influence of Genomics on MedTech. These stocks have a VGM Style Score of A or B and carry a Zacks Rank #3 or higher.
Illumina Inc (ILMN - Free Report)
Illumina’s portfolio of sequencing platforms comprises systems that are designed to meet the workflow, output and accuracy demands of a full range of sequencing applications. The company’s MiSeq sequencing system is a low-cost desktop sequencing platform that provides individual researchers with rapid turnaround time, high accuracy and streamlined workflow.
Illumina’s new product launches in the Genomics portfolio consistently contribute to the top line. Management is optimistic about the recently launched NovaSeq S1 flow cell reagent kit. The company also received a product approval certificate for the NextSeq 550Dx instrument from the Ministry of Food and Drug Safety (MFDS) in South Korea.
Over the past year, Illumina has outperformed the industry. The stock has gained 52.2%. The stock has a Zacks Rank #2 (Buy).
Thermo Fisher Scientific, Inc (TMO - Free Report)
Thermo Fisher offers a comprehensive portfolio of genotyping solutions for SNP, indel and CNV analysis.
The buyout of Affymetrix for $1.3 billion in 2017 is worth a mention when discussing the Genomics portfolio. Affymetrix, which works on multiplex and simultaneous analysis of biological systems at the cell, protein and gene level along with facilitating the transition of research tools into clinical and applied markets, has started to boost Thermo Fisher’s offering in the fast-growing flow cytometry market through an advanced antibody portfolio. Moreover, in genetic analysis, Affymetrix’s technologies will complement Thermo Fisher’s products in targeted clinical and applied markets.
Total synergy value is pegged at $70 million within the third year post the completion of the deal, which comprises cost synergy of $55 million and adjusted operating income benefit of $15 million.
Over the past year, Thermo Fisher has successfully outperformed the industry. The stock has gained 16.7%. The company has a Zacks Rank #3.
QIAGEN N.V. (QGEN - Free Report)
Various analysts opine that QIAGEN currently offers one of the broadest portfolios of molecular technologies for human healthcare. In 2017, the company announced three lab-developed tests for women’s and men’s health featuring a 34-gene panel to get to know individual risks of hereditary cancer types. The company also provides services in pharmacogenomics.
During the first quarter of 2018, the company announced the receipt of Japan’s Ministry of Health Labor and Welfare approval for QuantiFERON-TB Gold Plus (QFT-Plus) as an in vitro diagnostic to detect tuberculosis (TB) infection.
Over the past year, QIAGEN has been outperforming its industry. The stock has gained 4.3%. The company has a Zacks Rank #3.
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