AI, Cell/Gene Therapy, Precision Medicine Drive Bullish Biotech Investment
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AI, Cell/Gene Therapy, Precision Medicine Drive Bullish Biotech Investment
Survey of investors shows continued optimism for life sciences despite VC declines, antitrust and IP concerns
By Alex Philippidis
June 22, 2023
Credit: whyframestudio/Getty Images
While life sciences investment has retreated from its all-time highs during the COVID-19 pandemic, investors surveyed by a national business law firm are still bullish about the sector based on the growth potential seen in artificial intelligence (AI), cell and gene therapy (CGT), and other new technologies.
According to the 2023 Investment Funds Outlook Report issued recently by Barnes & Thornburg, more than one-third (36%) of 125 people surveyed included the life sciences as among areas of current investment or focus.
Of those life-sci investors, 29% said they plan to invest an average of between $6 million and $10 million in a life sciences fund, while 28% said they will invest an average $1 million to $5 million. Encouragingly, 18% of investors plan to invest more than $25 million on average, and 16% between $11 million and $25 million—though the remaining 9% said they will only invest less than $1 million.
The 125 investors consisted of limited partners, sponsors, and service providers who were surveyed in February with help from market data services provider Dynata. Survey respondents hailed from 29 U.S. states and represented hedge fund, private equity, credit, and venture capital organizations across the life sciences and more than a dozen other industries.
The life sciences investors told Barnes & Thornburg they will continue to pour as much capital into their life-sci funds as they did before the financial markets turned bearish two years ago.
That bearishness is reflected in declines for most biotech stocks as well as the 37% year-to-year decline in the total value of U.S. and European VC deals reported by EY, to $16.88 billion in 2022 from $26.62 billion in 2021. PitchBook data reported by commercial real estate firm Cushman & Wakefield a 28% year-over-year decline in U.S. life-sci venture investment, to $35.8 billion from $49.2 billion.
VCs, vaccines, and value
During Q1 2023, EY reported a total $2.381 billion in venture capital was invested in biotech companies, down 72% from the $8.541 billion invested a year earlier, and lower than any quarter of 2022.
The VC decline is of particular concern since the market downturn has impeded companies from raising greater sums of capital (and investors from cashing in on or “exiting” their investments) by going public, whether by completing initial public offerings (IPOs) or by forming special purpose acquisition companies (SPACs).
According to EY data, total biotech IPO value generated in Q1 2023 was $280 million, down 18% from $342 million in the year-ago quarter.
Is Ginkgo Bioworks Stock a Buy?
There's a lot to like about this business, but it's still a risky bet.
Ginkgo Bioworks (DNA -1.52%) has a lot going for it. It's a favorite of Cathie Wood's Ark Innovation ETF, it's a popular collaborator in the biopharma sector, and its positioning at the intersection of biotechnology, artificial intelligence (AI), and laboratory robotics means that it's exposed to a lot of exciting and value-enhancing developments.
But does that make it a buy, or just another stock getting hyped by the tech-hungry investors of the current bull market? Here's what you need to know.Why this company is probably going places
When biopharma businesses need to manufacture a large quantity of a biological reagent or product of some kind, they often choose to outsource it. But in order to outsource the process properly, they have to define the steps the contractors need to do to fulfill the specification. And in the context of bioengineering tasks for biomanufacturing purposes, that can be a tall order as the processes and technologies used for laboratory-scale work tend to be very different from the processes used for mass production.
Ginkgo Bioworks aims to address that issue while also providing sought-after biomanufacturing services. In a nutshell, the company's idea is to be a biofoundry, which means that it'll take designs for customized biological outputs like proteins or cells, and then implement a tailored manufacturing process that results in customers receiving those outputs at (ideally) industrial scale. By relying as heavily as possible on automation of the cognitive and manual work involved, it hopes to be more efficient than what customers could manage on their own.
What each customer needs from Gingko Bioworks is somewhat unique and usually more complicated than a basic pharmaceutical manufacturing routine. But there is evidence that capable players are finding real value in working with Ginkgo: Novo Nordisk, Pfizer, and many other biopharmas and agribusinesses are already running programs on its platform.Accessibility Menu
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Is Ginkgo Bioworks Stock a Buy?
By Alex Carchidi – Mar 15, 2024 at 5:07PM
Key Points
Ginkgo Bioworks is trying to make good on its promises of scaling up.
It's adding plenty of new programs, but its revenue is lagging.
Likewise, the company's ambitions of high efficiency have yet to be realized.
Buy Alert: Our 10 best stocks to buy right now (see the list)
There's a lot to like about this business, but it's still a risky bet.
Ginkgo Bioworks (DNA -1.52%) has a lot going for it. It's a favorite of Cathie Wood's Ark Innovation ETF, it's a popular collaborator in the biopharma sector, and its positioning at the intersection of biotechnology, artificial intelligence (AI), and laboratory robotics means that it's exposed to a lot of exciting and value-enhancing developments.
But does that make it a buy, or just another stock getting hyped by the tech-hungry investors of the current bull market? Here's what you need to know.
Expand
NYSE: DNA
Ginkgo Bioworks
Today's Change
(-1.52%) -US$0.17
Current Price
US$11.03
Why this company is probably going places
When biopharma businesses need to manufacture a large quantity of a biological reagent or product of some kind, they often choose to outsource it. But in order to outsource the process properly, they have to define the steps the contractors need to do to fulfill the specification. And in the context of bioengineering tasks for biomanufacturing purposes, that can be a tall order as the processes and technologies used for laboratory-scale work tend to be very different from the processes used for mass production.
Ginkgo Bioworks aims to address that issue while also providing sought-after biomanufacturing services. In a nutshell, the company's idea is to be a biofoundry, which means that it'll take designs for customized biological outputs like proteins or cells, and then implement a tailored manufacturing process that results in customers receiving those outputs at (ideally) industrial scale. By relying as heavily as possible on automation of the cognitive and manual work involved, it hopes to be more efficient than what customers could manage on their own.
What each customer needs from Gingko Bioworks is somewhat unique and usually more complicated than a basic pharmaceutical manufacturing routine. But there is evidence that capable players are finding real value in working with Ginkgo: Novo Nordisk, Pfizer, and many other biopharmas and agribusinesses are already running programs on its platform.
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Stock Advisor Returns
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S&P 500 Returns
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In fact, it added 78 new programs in 2023 to reach a total of 162, and it was running more than twice as many programs for customers in pharma than it was two years prior. That led to the segment bringing in revenue of $44 million last year out of a top line of more than $251 million.
Ginkgo isn't yet profitable on an operational basis. But as its biofoundry gains more customers, more programs, and more throughput, it could be able to drive its costs of servicing each program downward. Then it could undercut the other biological manufacturing businesses while potentially returning capital to its investors as well. And that'd make it a smart purchase today -- if it happensThe main argument for not buying Ginkgo stock is the company's difficulty in maintaining a steadily growing base of revenue. Furthermore, its expenditures are soaring in absolute terms, as well as when expressed as a proportion of revenue. Take a look at this chart
Is Ginkgo Bioworks Stock a Buy?
There's a lot to like about this business, but it's still a risky bet.
Ginkgo Bioworks (DNA -1.52%) has a lot going for it. It's a favorite of Cathie Wood's Ark Innovation ETF, it's a popular collaborator in the biopharma sector, and its positioning at the intersection of biotechnology, artificial intelligence (AI), and laboratory robotics means that it's exposed to a lot of exciting and value-enhancing developments.
But does that make it a buy, or just another stock getting hyped by the tech-hungry investors of the current bull market? Here's what you need to know.Why this company is probably going places
When biopharma businesses need to manufacture a large quantity of a biological reagent or product of some kind, they often choose to outsource it. But in order to outsource the process properly, they have to define the steps the contractors need to do to fulfill the specification. And in the context of bioengineering tasks for biomanufacturing purposes, that can be a tall order as the processes and technologies used for laboratory-scale work tend to be very different from the processes used for mass production.
Ginkgo Bioworks aims to address that issue while also providing sought-after biomanufacturing services. In a nutshell, the company's idea is to be a biofoundry, which means that it'll take designs for customized biological outputs like proteins or cells, and then implement a tailored manufacturing process that results in customers receiving those outputs at (ideally) industrial scale. By relying as heavily as possible on automation of the cognitive and manual work involved, it hopes to be more efficient than what customers could manage on their own.
What each customer needs from Gingko Bioworks is somewhat unique and usually more complicated than a basic pharmaceutical manufacturing routine. But there is evidence that capable players are finding real value in working with Ginkgo: Novo Nordisk, Pfizer, and many other biopharmas and agribusinesses are already running programs on its platform.Accessibility Menu
▲ S&P 500 +172% | ▲ Stock Advisor +891%
The Motley Fool
Top 10 Stocks to Buy Now ›
Free Article
Is Ginkgo Bioworks Stock a Buy?
By Alex Carchidi – Mar 15, 2024 at 5:07PM
Key Points
Ginkgo Bioworks is trying to make good on its promises of scaling up.
It's adding plenty of new programs, but its revenue is lagging.
Likewise, the company's ambitions of high efficiency have yet to be realized.
Buy Alert: Our 10 best stocks to buy right now (see the list)
There's a lot to like about this business, but it's still a risky bet.
Ginkgo Bioworks (DNA -1.52%) has a lot going for it. It's a favorite of Cathie Wood's Ark Innovation ETF, it's a popular collaborator in the biopharma sector, and its positioning at the intersection of biotechnology, artificial intelligence (AI), and laboratory robotics means that it's exposed to a lot of exciting and value-enhancing developments.
But does that make it a buy, or just another stock getting hyped by the tech-hungry investors of the current bull market? Here's what you need to know.
Expand
NYSE: DNA
Ginkgo Bioworks
Today's Change
(-1.52%) -US$0.17
Current Price
US$11.03
Why this company is probably going places
When biopharma businesses need to manufacture a large quantity of a biological reagent or product of some kind, they often choose to outsource it. But in order to outsource the process properly, they have to define the steps the contractors need to do to fulfill the specification. And in the context of bioengineering tasks for biomanufacturing purposes, that can be a tall order as the processes and technologies used for laboratory-scale work tend to be very different from the processes used for mass production.
Ginkgo Bioworks aims to address that issue while also providing sought-after biomanufacturing services. In a nutshell, the company's idea is to be a biofoundry, which means that it'll take designs for customized biological outputs like proteins or cells, and then implement a tailored manufacturing process that results in customers receiving those outputs at (ideally) industrial scale. By relying as heavily as possible on automation of the cognitive and manual work involved, it hopes to be more efficient than what customers could manage on their own.
What each customer needs from Gingko Bioworks is somewhat unique and usually more complicated than a basic pharmaceutical manufacturing routine. But there is evidence that capable players are finding real value in working with Ginkgo: Novo Nordisk, Pfizer, and many other biopharmas and agribusinesses are already running programs on its platform.
Motley Fool Returns
Motley Fool Stock Advisor
Market-beating stocks from our flagship service.
Stock Advisor Returns
891%
S&P 500 Returns
172%
Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 01/08/2025.
Discounted offers are only available to new members. Stock Advisor list price is $199 per year.
Join Stock Advisor
In fact, it added 78 new programs in 2023 to reach a total of 162, and it was running more than twice as many programs for customers in pharma than it was two years prior. That led to the segment bringing in revenue of $44 million last year out of a top line of more than $251 million.
Ginkgo isn't yet profitable on an operational basis. But as its biofoundry gains more customers, more programs, and more throughput, it could be able to drive its costs of servicing each program downward. Then it could undercut the other biological manufacturing businesses while potentially returning capital to its investors as well. And that'd make it a smart purchase today -- if it happensThe main argument for not buying Ginkgo stock is the company's difficulty in maintaining a steadily growing base of revenue. Furthermore, its expenditures are soaring in absolute terms, as well as when expressed as a proportion of revenue. Take a look at this chart
RANDHAWA7822
2025/01/05 19:49
Bitcoin (BTC) has experienced significant growth
Bitcoin ($BTC ) has experienced significant growth, with its price currently around $97,992.
Analysts have provided various predictions for Bitcoin's price by 2025:
Galaxy Research: Alex Thorn anticipates Bitcoin exceeding $150,000 in early 2025, potentially reaching $185,000 by year's end, driven by increased institutional adoption and
BGUSER-AEJ9PSGU
2025/01/01 17:15
Global economic conditions and the adoption of bitcoin by institutions, corporations, and even nation-states are expected to influence its price.
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Alex Thorn of Galaxy Digital predicts bitcoin's price will exceed $150,000 in the first half of 2025 and potentially reach $185,000 by the end of the year.
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