If you haven't heard, designer babies may be on the horizon. Thanks to CRISPR-Cas9 technology ("Clustered Regularly Interspaced Short Palindromic Repeats"), some scientists believe they can edit human genes for the purposes of treating diseases.
As anyone who's watched Gattaca would know, this could be the gateway to a future where people with resources can engineer themselves and their offspring, resulting in a more inequitable social struggle. In 2015, 15 of 22 countries in Western Europe banned the modification of genes in human embryos. Yet despite our own ethical objections to the implications of this new technology, other countries are pushing forward aggressively with CRISPR research. And given the technology's potential to treat a variety of diseases like cancer, HIV, blood disorders, and heart disorders, it's not surprising. Last year, a study in the US showed that it was possible to correct mutations in human embryos, thus preventing a life-threatening heart condition (the embryos were not permitted to come to term).
This year, scientists in the US and Europe will begin conducting human trials using CRISPR. But in China, where there are less stringent hurdles for clinical trials, scientists have already been conducting human trials for several years--potentially positioning China to take the lead in this research. Below is a recent timeline of China's push into developing CRISPR technology.
2015: China treated 86 non-viable embryos with CRISPR to treat an inherited blood disorder. Partly successful in 33% of samples.
2016: A Chinese study attempted to treat non-viable embryos with genes to provide resistance to HIV. Gene insertion partly worked in 25% of the 26 embryos.
2017: The researchers in the 2016 study theorized the embryos were too abnormal to respond to CRISPR properly. As such, they then applied CRISPR on viable human embryos and achieved better results than the 2016 study.
2018, April: Merck KGaA was granted a patent by the Chinese Patent Office for its CRISPR technology.
2018, May: Chinese firms 3SBio and Sequoia China invested in Refuge Biotechnologies' $25m funding round for its development of CRISPR therapies.
While several Western companies are in the headlines for CRISPR (see CRISPR Therapeutics, Intellia Therapeutics, and Ligand Pharmaceuticals), we believe investors should not ignore the development of CRISPR in China and the companies that would benefit from future breakthroughs there. Of course as with any new technology, there are risks that it simply doesn't work. A paper published in January this year (note: it was not peer reviewed) suggested that CRISPR may not be effective in humans.
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As international equity investors, the team at R Squared Capital Management (former team at Julius Baer / Artio Global) utilizes fundamental and macro analysis in our quest to correctly identify structural tailwinds and headwinds at the geographic, sector and company levels.
FROM THE DESK OF DAEIL CHA
Daeil Cha is a Partner and Analyst at R Squared Capital Management.
Prior to joining R Squared, Daeil was an Analyst at Suffolk Capital Management.
Daeil received an MBA from Columbia University and a Bachelor of Arts in Psychology, with a focus on Neuroscience, from Princeton University.
To view other RSQ team member bios, click here.