Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Smart Money Is Piling Into Regenerative Medicine

Companies / BioTech Apr 18, 2017 - 06:12 PM GMT

By: John_Mauldin

Companies

BY PATRICK COX : The Congressional Budget Office released its long-term budget outlook. This report should have sparked a national discussion about societal aging, but big media largely ignored it.

Fortunately, there are signs that smart investors are hedging this failure by investing in regenerative medicine (RM).


Over the last few years, the CBO has emerged as one of the few grownups in the room. Its annual budget projections have focused on population aging as the main driver of US federal deficit and the debt.

The core message of "The 2017 Long-Term Budget Outlook" is simple: Mandated transfer payments for our increasingly older demographic are just too much.

These costs have crippled the federal government and the private sector. The CBO warns that this is causing economic instability. As a result, a cascade of financial crises is more and more likely.

Only three parts of the budget are growing in relation to the whole. They are Social Security, health care, and net interest.

Social Security is clearly about the aged, so are increased healthcare costs. The CBO says those costs will continue to rise.

The reason? We are living longer and new treatments for age-related diseases continue to emerge. But even if dramatic cuts are made to benefits for the aged, it will only slow the meltdown.

Why? Long-term demographic trends will continue. Life expectancies will keep rising as birthrates fall.

Progressive Approval Could Be a Game Changer for RM

Japan is ahead of the curve in terms of demographics, but the US will soon get there. It is important to note that Japan has failed to produce political solutions to its budgetary woes.

But Japan has started to look at this problem through a different lens. These economic issues can be solved by addressing aging itself.

Japanese lawmakers have instituted progressive approval for regenerative medicine (RM). That means after successful safety trials, RM therapies can be approved. Data will then be collected and made public.

Critics of progressive approval claim it could legalize ineffective treatments. The Japanese think that the risk of delaying true anti-aging therapies is greater than the risk of approving ineffective treatments.

Japanese leadership seems to have had a major impact on the investment community. Now, US firms are eyeing the prospect of gaining much faster approvals in Japan.

This has major financial implications for RM biotechs.

Investing in Regenerative Medicine

A recent report from Goldman Sachs includes a section titled “The Coming Age of Regenerative Medicine.”

Business Insider article about the report is aptly titled “Money is pouring in to a hot new area of science that could change the way we think about aging.

According to the article, “venture capital in companies pursuing regenerative medicine increased from $296 million in 2011 to $807 million in 2016, growing roughly 34% year-over-year.”

The author also writes that, “by the report's count, 80 regenerative-medicine companies received funding in the last three years, and the deals related to regenerative medicine accounted for almost half of the top venture-capital deals in 2015 and 2016.”

Two years ago, Fed Chair Janet Yellen threw cold water on biotech. She compared it to overheated social media.

I think Yellen was wrong. And her off-the-cuff comment hurt startups struggling to find funds in order to survive.

On the other hand, economist John Mauldin has long predicted that there will be a bubble following the public’s realization of the power of emerging RM.

But bubbles aren’t uniform things. History teaches us that under- and overvalued companies exist at almost all times.

Some of the companies covered in the Goldman report seem overvalued to me. Analysts, though, are frequently wrong.

We never know what a company is truly worth until its products are judged by consumers.

The Goldman report discusses Samumed, a private RM company. With $300 million in funding, it’s valued at a staggering $12 billion. Samumed’s drug platform aims to regenerate various tissues such as bone, cartilage, hair, and skin.

As Samumed is not yet public, my interest in the company is academic. The larger question is what it means to more established RM companies.

AgeX Plans to Reverse Aging

The original RM company, Geron, is now folded into BioTime subsidiary Asterias. BioTime (*see disclosure below) is the core of my RM portfolio. This is largely because of Michael West, who pioneered the SCI therapy at Geron over 20 years ago.

To date, West's stem cell treatment for spinal cord injury is the most successful example of RM, but it’s 20 years old. Since that time, West’s research has progressed much further.

Last week, BioTime announced a new subsidiary, AgeX. AgeX has a range of stem cell IPs aimed at conditions such as cardiovascular repair and diabetes.

The true goals of AgeX, though, are much more radical. West intends to reverse aging … hence the company name.

He believes he can reactivate embryonic gene pathways to completely regenerate limbs and organs, including eyes, joints, and hearts. AgeX’s induced tissue regeneration technology would not only regenerate damaged and missing tissues.

It would turn back the biological clock of aging. West gave an excellent talk on this new science in his keynote address at the 2016 World Stem Cell Summit.

If he’s right, we’ll still have lots of problems, but the cost of age-related diseases won’t be one of them.

Stay in the Loop on Life-Extending Research with Patrick Cox's Tech Digest

This weekly newsletter by biotech expert Patrick Cox highlights research that is much more advanced than most people know, and the profit potential for investors is vast. Read about the latest breakthroughs—from new, non-invasive cancer treatments to age-reversing nutraceuticals and vaccines that kill any virus–as well as the innovative companies that work on them. Get Tech Digest free in your inbox every Monday.

(*Disclosure: The editors or principals of Mauldin Economics have a position in this security. They have no plans to sell their position at this time. There is an ethics policy in place that specifies subscribers must receive advance notice should the editors or principals intend to sell.)

John Mauldin Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in