• In the future, people will volunteer to amputate their limbs. Here’s why…
  • Thanks to CRISPR, health care costs will plummet
  • Using AI to handle the “bigness of biology”

Dear Reader,

I am back home after spending a few days last week at the 2019 STAT Summit up in Boston. The conference focused on the world of biotechnology and bleeding-edge developments in medical science. And it was jam-packed with all the top minds in the industry.

This was the inaugural year for the summit, and it was invite-only. The executive editor said on stage that he had to turn down far more applications to attend than there were executives in attendance. That’s impressive.

And that’s why I jumped on the opportunity to attend as soon as I received my invitation.

We talked about some of the top highlights from the conference over the weekend and yesterday, and I have several more insights from it to share with you today.

But first, I have to direct your attention to what I believe is a once-in-a-lifetime opportunity.

I’ve been pounding the table on CRISPR genetic editing technology for four years now. As soon as I understood CRISPR, I knew it would be a game changer. CRISPR is like software programming for DNA. It allows scientists to “cut out” harmful genetic mutations and replace them with healthy DNA.

I said from the start that this technology would ultimately cure every human disease of genetic origin. I have never wavered on that, but I also haven’t had proof to back up my claim. Until now…

In the coming weeks, one small-cap CRISPR company will release the results of its latest human trial. And based on my “boots on the ground” research, I believe these results will shock the world. We are going to see this company dominate the 24-hour news cycle in the days to follow.

And, of course, that will lead to massive gains. I predict shares in this small-cap stock will soar as high as 1,000% in the aftermath.

Simply put, this is a stock that needs to be in every tech investor’s portfolio right now. Please don’t let this opportunity pass by. You can get all the details right here.

Okay, let’s move on to our biotech insights for today…

The future of bionic limbs…

At the very beginning of the 2019 STAT Summit, there was a session on the future of bionic limbs. Bionic limbs are artificial arms, legs, hands, or feet. This is truly the stuff of science fiction.

Well, the most advanced surgeon in this space is Dr. Matthew Carty. He is the director of the Lower Extremity Transplant Program at Brigham Health as well as an associate professor at Harvard Medical School.

Dr. Carty and his team have been working on a concept called proprioception. This refers to the brain’s ability to “feel” the body’s limbs and to “sense” the body’s movement. So we aren’t talking about regular prosthetic limbs here. Dr. Carty’s team is working on prosthetic limbs that “feel” like regular body parts.

This is bleeding-edge work. The team is inserting sensors into the outermost layer of the skin. These sensors are connected to the prosthetic limb. They allow the brain to “sense” the limb. This, in turn, allows the patient to control it with his or her mind.

To demonstrate this, the team previewed a documentary called Augmented, which gives viewers an inside look at this exclusive project.

And it is exclusive. As of last week, the team has only done 21 reconstructive surgeries using this process.

And the patients confirm that they “feel” like they have control of their prosthetic limb and can sense its movement. They think about wiggling their bionic foot, and it wiggles. This hasn’t been possible before.

Now, this project opens the door to some uncomfortable possibilities…

Hugh Herr, a Biomechatronics specialist from MIT Media Labs, said that he could imagine a day when people would choose to amputate their own intact, functional limbs just to get a bionic replacement. That’s how superior the functionality will be. The bionic limbs will be faster and stronger than their flesh and bone counterparts.

It’s a very uncomfortable thought, but it is guaranteed to happen. Brain-computer interfaces are the beginning, and human augmentation will clearly not stop there.

What biotech executives think of the controversial pharma bill…

House Speaker Nancy Pelosi’s H.R. 3 pharma bill is a hot topic in biotech right now. This was a big point of discussion at the STAT Summit. The bill proposes aggressive measures intended to slash the price of drugs and biotech therapies.

And I can tell you that biotech executives across the board at the conference widely opposed this bill. It was not a partisan issue at the conference; it was just seen as a terrible idea.

According to industry research, the bill will eradicate the industry’s profitability and its ability to develop new therapies… And it won’t bring down health care costs in a significant way. Here’s why…

In the U.S., the biopharmaceutical industry invests about 18% of all research and development (R&D) across all industries. Only the computers and electronics industry comes close to this. Gilead Sciences CEO Daniel O’Day hammered home this point.

Then, the CEO of the trade group Pharmaceutical Research and Manufacturers of America, Stephen Ubl, projected that the bill will take $1 trillion out of the biopharmaceutical industry over the next 10 years. This will coincide with the loss of about a million jobs in the U.S. as well.

The biopharmaceutical industry spends about $90 billion per year on R&D. That’s $900 billion over 10 years. Obviously, a $1 trillion hit wipes it all out. The R&D would dry up.

Then Vertex Pharmaceuticals CEO Jeffrey Leiden pointed out that as an industry, biopharma only produces a single-digit return on investment (ROI). He furthermore elaborated that a 20% drop in drug prices would result in a negative ROI for the industry. Obviously, we can’t run businesses at a negative ROI for very long.

Now, here’s where it gets interesting…

Drug prices make up only 10–14% of total health care spending in the United States. Even if we strip out all profits from drugs – meaning, if we make biopharmaceutical companies sell their drugs at breakeven levels – Leiden estimates that it would reduce the total cost of health care by just 1.6%. That’s it.

Pelosi’s H.R. 3 bill would decimate the R&D budgets of the companies that are developing therapies to save lives, and the actual cost savings in the health care industry would drop by just 1.6%.

And the worst part is that more people would die on faster timelines… because they wouldn’t receive the new drugs that would have otherwise been developed.

So drug prices are not the main problem. In fact, a better place to look to address the increases in drug prices is the pharmacy benefit managers (PBM).

PBMs choose what drugs insurance will cover, negotiate purchasing deals with drugmakers, determine co-pays for consumers, decide which pharmacies prescription plans will include, and decide how much to reimburse pharmacies for the drugs they sell.

And in the U.S., the cabal of PBMs is dominated by just three companies with way too much power – CVS Caremark, Express Scripts, and OptumRX.

But the largest costs in health care are hospital stays. And that got me thinking… The best way to tackle this problem is to keep people out of the hospital. A pretty simple thought, I know. But stick with me…

What’s the best way to keep people out of the hospital? Easy – cure their diseases. That is exactly what CRISPR Therapeutics and Vertex Pharmaceuticals just did for sickle cell disease and beta thalassemia, as we talked about over the weekend.

Our future projections about ballooning health care costs are way off. Costs aren’t going to skyrocket… because every year we will cure more genetic diseases.

When we cure these diseases, patients are no longer going to be staying in the hospital. Hundreds of millions of dollars of expense, and eventually billions of dollars, will be saved annually from this trend.

This year, we are seeing cures for sickle cell disease and beta thalassemia. What are the next three or four diseases that will be cured in 2020? And even more in 2021?

And the best part is that millions of lives will be saved, and the quality of life will dramatically improve.

We will eventually get to the point where the only remaining diseases will be those caused by environmental factors and unhealthy lifestyle choices. And our health care systems will look dramatically different than they do today.

So I have said it before, and I will say it again: Technology is the solution… not politics.

The coming AI boom in biomedicine…

We talked yesterday about how artificial intelligence (AI) is about to revolutionize drug development and speed up the Food and Drug Administration (FDA) process. This was another big topic of discussion at the conference.

I think the most striking perspective came from Aviv Regev, Ph.D., a professor at MIT and chair of the faculty at the Broad Institute of MIT and Harvard.

Dr. Regev said that the “bigness” of biology used to be seen as a bad thing. She said that scientists had to make biology “small” to make it manageable.

What Dr. Regev meant was that we humans didn’t have the ability to work with all the biological information available to us. We had to simplify things in order to make the data sets and analysis manageable. And that, of course, limited our range of outcomes.

Well, we don’t have that problem any longer. We can now run data through AI models powered by deep neural networks that enable the AI to “think.” And that opens the door to an explosion of innovation and development.

In fact, there are more than 800 investigational new drug applications (INDs) for cell and gene therapies on file with the FDA right now. That means 800 new therapies are waiting for FDA approval to start Phase 1 human clinical trials. It’s an avalanche of innovation.

Of course, the FDA isn’t set up to process all this work. FDA CIO Amy Abernethy went as far as to say that the regulatory body is “stuck back in the 2005 era.”

In other words, the agency needs to evolve with the times. The amount of innovation isn’t going to slow down. It is going to increase… rapidly.

Therefore, the FDA needs to be able to handle a high volume of new filings and get them approved within a reasonable time frame. That’s especially true as AI is unleashed on drug development.

Regards,

Jeff Brown
Editor, The Bleeding Edge

P.S. I mentioned today that curing disease is the key to reducing health care costs. This just happened with sickle cell disease and beta thalassemia. These two cures alone will result in the savings of hundreds of millions of dollars in health care costs.

And I have good reason to believe that we are weeks away from curing another debilitating disease… except this one will be even more impressive. In fact, I think we will see this story run for days on the 24-hour news cycle after it breaks.

I don’t do this often, but I highly recommend all tech investors get some exposure to one CRISPR company that’s about to make headlines with the next cure. If what I’m hearing behind closed doors is accurate, it’s going to be jaw-dropping.

Simply go here to get all the details.

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