Illumina: Lower Sequencing Costs Are Unleashing A Genetics Mega-Trend

Summary

Genetics will be one of the future branches of healthcare.

The technology might be complex, but investors shouldn’t dismiss it on that ground.

There are already great business models around this technology that should make investors salivate.

Usually, the technology field is populated by a special type of investor. Because of the jargon and the perceived complexity of the processes involved, normal investors are fazed away. Therefore, the audience for niche tech stocks tends to be people with some technical knowledge of the industry and the narrative around these stocks is heavily focused on the technical stuff.

As an investor, I tend to go after these hard-to-understand types of industries. If most people overlook these fields because of its complexity, then there must be some reward for someone willing to make the effort. More often than not, the research conclusions tend to reveal a far easier to understand thesis than perceived at the start.

In this case, after spending time investigating genome and its related fields, I got the impression that, although the technical side is complex, the business models are not that different from other traditional sectors. As the technology evolves and becomes commercially viable, common investors should start looking at this field as just another branch of traditional healthcare (and maybe consumer wellness and fitness, in a not far future). To help you with that, the following paragraphs will unfold a simple, but solid, narrative that I hope will at least trigger your interest in the sector.

(Photo credit: Thomas Wensing)

From aspiration to reality

Human genome sequencing promises to be one of the mega trends in healthcare during the next decades. As technologies evolve and prices drop, more and more possibilities are emerging at a fast pace.

Having a detailed health map of oneself is an old desire that might not be that far away. However, for the scope of this article, I’ll focus on 2 main areas where I see the most potential in the medium term. I am referring to undiagnosed diseases and early cancer detection/treatment.