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Funds investing in the fight against cancer: investing in oncology companies
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Funds investing in the fight against cancer: investing in oncology companies

In 2020, 19.3 million new cases of cancer were reported worldwide. By 2040, that figure could increase by 50%.
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3 FEB, 2023

By RankiaPro Europe

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World Cancer Day is celebrated on February 4 and is promoted by the World Health Organization, the International Agency for Research on Cancer, and the International Union Against Cancer. The objective is none other than to raise awareness and mobilize society to advance in the prevention and control of this disease.

According to estimates by the International Agency for Research on Cancer, 19.3 million new cases of cancer were reported worldwide in 2020. By 2040, that figure could increase by 50% to 30.2 million.

One promising approach is CAR-T cell therapy. This involves specifically modifying an immune cell (T cell) by importing a certain gene so that it recognizes tumor cells when they are returned to the patient and destroys them. Currently, he notes, there are few products that are used exclusively in the fight against blood cancers. "However, the range of applications and the number of products are likely to increase in the near future," predicts the biotechnology expert. The market potential is consequently good. "A sales volume of between $10 billion and $20 billion could be achieved in the next seven to ten years, which is a significant increase over the $1.6 billion predicted for this year," Irani says.

Research on mRNA vaccines related to the fight against Covid-19 has also advanced cancer therapy. "Because so many people have already been vaccinated against Covid-19 with mRNA vaccines, a very large database on this technology has emerged in a short period of time, which could also be used for research in the fight against cancer." Cancers such as blood cancer and lymphoma are already partially curable. In addition, new cancer drugs, especially in connection with immuno-oncology, have led to a considerable increase in average life expectancy over the past ten years. Further improvements can be expected as a result of ongoing research.

What funds do you invest in the fight against cancer?

More and more companies are doing research to find a cure for this disease and save lives. Below, we show you some of the investment funds and strategies that currently exist in the market to fight cancer; the good thing about investing in this type of fund is that, in addition to helping in the research for a cure against cancer and other diseases, the investor can be rewarded.

BNY Mellon Investment Management

As more areas of medicine face generic competition, research efforts have turned to oncology and other disease categories with large unmet medical needs. At the same time, the cost of genetic sequencing has dropped from about $1 billion in the early 2000s to a few hundred dollars today, leading to a boom in genetic disease research, including cancer. The net result has been a dramatic increase in new cancer therapies, which made up more than 30% of all new drugs approved by the U.S. Food and Drug Administration in recent years.

We believe this trend will continue, with important implications for biopharma.
At the same time, the pharmaceutical industry is recognizing the growth potential, spending billions of dollars on research and development, partnering with developers, and acquiring biotech companies pioneering much of the research. As a result, while revenues for some blockbuster drugs have begun to decline as generic competition increases, oncology biopharma sales have soared. We believe this trend could continue over the next decade, especially as big data and machine learning capabilities improve, new drug targets are discovered, and a growing middle class around the world which is largely aging-increasingly seeks new cancer treatments.

In our view, big pharma and biotech companies that integrate cancer-targeted approaches into a diversified portfolio of new drugs could bolster their growth, offsetting the negative impacts of patent expirations and potentially surprising investors.

Rudi Van de Eynde, Head of Global Thematic Equities and co-manager of Candriam Equities L Oncology Impact Fund

Candriam Equities L Oncology Impact is an equity fund that invests globally in companies related to the fight against cancer. The investment universe is focused on companies with a market capitalization of over $100 million and that offer a significant contribution to cancer treatment in these 4 broad areas: diagnostics and research, pharmaceuticals and biotechnology, medical technology, and big data and artificial intelligence.

The fund's portfolio is composed of between 30 and 60 high-conviction stocks. Finally, as its name suggests, it is an impact fund due to the following fact: 10% of the net management fee is donated to cancer associations in the various countries in which we are present. In the case of Spain, this donation is made to the Spanish Association Against Cancer.

Why invest in this area? Around 9 out of 10 cases of cancer occur in people over 50 years of age. As the aging of the population increases - experts predict that the percentage of people over 65 will double by 2050 - the threat posed by cancer will increase in parallel.

The number of clinical trials initiated in oncology has roughly doubled in the last 10 years, reaching a historically high level of 2335 in 2021. Progress in clinical trials generates dozens of unique new treatments approved each year, so in the battle against cancer, we are already equipped with many effective drugs, which clearly translates into improved benefits for patients.

Healthcare assets have weathered the macro and geopolitical environment relatively well compared to the broader markets. However, we continue to see the evolving need to discover, finance, and develop new drugs, given drug prices, high margins, and clinical outcomes, as a clear catalyst. Most large healthcare companies have strong balance sheets that are barely affected by higher financing costs. Moreover, the consumption of medical products is not economically sensitive, since diseases must be treated regardless of the economic situation in which we find ourselves. Cancer is currently the second leading cause of death in the world. Worldwide, it is estimated that the number of cancers diagnosed will increase by more than 70% by 2040. The sector will continue to benefit from the growth of the world's population, the increase in life expectancy, the rise of the middle classes in emerging countries, strong investments in R&D as well as the innovation of these types of companies and M&A processes by having greater visibility on company figures and growth expectations.

Andy Acker, Portfolio Manager responsible for managing the Global Life Sciences and Biotechnology strategies at Janus Henderson

Cancer is the second leading cause of death in the world and nearly 40% of us will be diagnosed with cancer at some point in our lives. We spend more than $1 trillion each year on treatments, and it is the leading area of R&D spending in the biopharmaceutical sector. Since the development of radiation therapy in 1903, followed by chemotherapy, progress was significant throughout most of the 20th century. However, some of the most important advances have occurred in the last 20 years, with more targeted and effective therapies. Not only have we seen a reduction in mortality, but also better outcomes and a reduction in side effects with more targeted therapies.

We used to identify cancer by tissue types, such as lung, breast, or pancreatic cancer. Now we can be more precise with our diagnosis thanks to the use of genetic sequencing. This has led us into the field of precision oncology, with more specific identification and, ultimately, targeted treatments. As an analogy, this evolution in treatments is like moving from carpet bombing to higher precision-guided missiles.

There have been multiple advances in precision therapies, such as antibody-drug combinations (ADCs), immunotherapies, and cell therapies. ADCs are targeted therapies designed to selectively eliminate tumor cells, leaving healthy cells largely intact. This allows for a more targeted approach with fewer side effects than traditional chemotherapies.

This year, a new Enhertu ADC targeting a subset of breast cancer showed a striking 72% reduction in disease progression and death compared to standard care in second-line patients. Immunotherapies help the immune system itself fight cancer. Cancer cells upregulate genes that suppress or slow down anti-tumor immunity, but we now have specific inhibitors such as Keytruda that can remove the immune system's brake to enable tumor destruction. As an example, Keytruda and traditional chemotherapy have been shown to reduce the risk of death from lung cancer by half compared to traditional chemotherapy alone.

Another form of immunotherapy is the so-called CAR-T cell therapy. This is a process in which the patient's own T-cells are extracted and modified to make them more capable of attacking cancer cells. Recently, we have seen a CAR-T Carvykti therapy in myeloma that gave patients with the late-stage disease more than two years without progression after a single treatment. Even more exciting, trials of Carvykti in earlier lines of therapy have been successful, and CAR-T therapies are expected to be increasingly used to control early-stage cancer, providing even greater benefits.

In addition to all the incredible advances we have seen in cancer treatment, we are also hopeful to see major improvements in the early detection of this pathology. Today, most cancers are asymptomatic. Patients usually do not experience symptoms until it is too late. By the time cancer has been picked up by traditional imaging tests, it has often spread to other areas of the body. At this stage, the 5-year survival rate is only 20%. However, if we can detect cancer earlier, while it is in its early stages, the 5-year survival rate jumps to nearly 90%. Companies such as Illumina/Grail and Exact Sciences are looking to develop blood tests that can identify cancer markers in the bloodstream. Being able to identify cancer before symptoms begin could potentially save more than 100K lives a year.

Janus Henderson Global Life Sciences' strategy seeks to uncover opportunities that span the entire spectrum of life sciences, including actions in the biotechnology, pharmaceutical, health services, and medical technology sub-sectors. Our fundamental, in-depth, bottom-up research seeks to identify companies that address high unmet medical needs and those that make the healthcare system more efficient. We believe these companies can generate shareholder value across a variety of market environments.

* National Cancer Institute

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