GenoMed Inc. (GMED)

[sam1933]

The Next Big Thing: Personalized Medicin
forbes.com/Adviser Soapbox

Jim Oberweis, The Oberweis Report, 05.28.09, 12:40 PM EDT
Following in the footsteps of tech, biotech and the Internet, genomics is shaping up to be the next investing boom.

The argument can be made that the surge of biotech development in the 1980s and 1990s was a result of increased government funding for programs like the National Institutes of Health, which bridged the gap between the academically possible and the commercially profitable.

From 1983 to 1993, the budget of the NIH increased 158%, rising from $4 billion to $10 billion. From 1993 to 2003, that budget increased another 163% to $27 billion. In addition to opening its purse strings, Congress also passed a series of laws that fostered the ability to profit from biotech discoveries.

In particular, the Bayh-Dole Act of 1980 permitted universities and small businesses to patent discoveries that evolved from NIH-funded research. Indeed, I think the biotech boom was a direct consequence of rising National Health Institute funding, cheap equity capital, and the ability to patent NIH-funded discoveries.

Under the Obama administration, NIH funding will explode once again, and there is a possibility that a similar wave of innovation will follow. In the last five years, under President Bush, NIH funding remained flat at $27 billion to $29 billion annually. The recently passed U.S. stimulus plan allocates $10.4 billion in additional NIH funding to be spent before September 2010, a windfall equaling roughly 30% of the annual budget.
In addition to the immediate flush of cash, the allocation demonstrates the new administration's commitment to public science funding. Research and academic institutions will benefit, as will the companies that support them.

No area is better positioned to benefit than genomics and personalized medicine. With knowledge of an individual's genetic makeup, doctors will prescribe drugs with far better understanding of their efficacy for that particular individual.

The cost of obtaining one's genotype through entire genome sequencing is plummeting: Sequencing cost $300 million in 2003, $1 million in 2007, $60,000 in 2008, is currently under $10,000, and will likely fall below $1,000 by the end of this year. Once below $300, gene sequencing will be cheap enough to be part of routine medical care. With costs this low, personalized medicine is just around the corner.

Just as with biotechs, making money from genomics could well prove elusive. Undoubtedly, genomics will produce an explosion of innovation. But finding the winners in advance is tricky business. Just like makers of picks and axes during the 18th-century California gold rush, makers of the tools that facilitate fast, cheap gene sequencing may be the safest bet.

http://www.forbes.com/2009/05/28/illumina-life-genomics-personal-finance-guru-insight-nih-genes.html