Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation.
Executive summary: Living longer and better is what most of us wish for. Mutually supporting developments in science and technology are making this aspiration an increasing reality. The anti-ageing market is already worth $40bn, but at stake is the much bigger prize of being able to disrupt the $4tr spent annually on pharmaceuticals and healthcare across the world. We should expect to see an acceleration in the development of regenerative therapies based around genomics as well as more focused pharmacological drugs and even potentially radical ideas such as brain revitalisation. Scientific longevity trials are at an all-time high while investment into start-ups involved in the area has doubled in the last year. While there are inevitable risks attached to investing in this field (above and beyond regulation), our approach is to favour proven diagnostics or speciality equipment businesses such as Illumina and Thermo Fisher.
The quest for eternal life is an enduring one and has been a topic for both writers of fiction and practitioners of science across almost all cultures throughout the ages. There is a paradox inherent in the idea that while we constantly struggle to survive, ageing and death are universal and seemingly inescapable. However, advancements are occurring at an accelerating pace across the longevity landscape, driven by a convergence of technologies and scientific developments. Digitising the body is logical: if you can’t measure it, then you can’t begin to consider impacting it. Steve Jobs, the late Chief Executive of Apple was of the view that “the biggest innovations of the 21st Century will be at the intersection of biology and technology.” The aggregated potential of reduced gene sequencing costs, vast computational power, advances in stem cell research, genomics and artificial intelligence could be enormous.
Longevity, defined simply, relates to the length of a person’s life; something we typically characterise as life expectancy. How long a person in the developed world can reasonably be expected to live has increased markedly, from 47 in 1900 to 80 in 2015 owing primarily to improvements in sanitation and the curing of childhood diseases. Given ongoing advances in healthcare, with every decade that passes, the average well-off person can be expected to see another 2.5 years added to their life expectancy. Today, there are approximately 500,000 people above the age of 100, yet this figure could double over the next decade (all data per the United Nations).
The inevitable challenge, however, is how to preserve quality of life as people age. No one naturally wants to live substantially longer if this period of extended existence is accompanied by a deterioration in physical and mental functions. Put another way, technology has undoubtedly changed how we lead our lives, but can it also help us live not just longer, but also better? This question matters, since demographics and health are commonly seen as the two most important drivers for long-term economic growth. Dramatic increases in lifespan could conceivably drive an economic boom were human productive years to extend far beyond current retirement years.
There is no consensus about the mechanisms of ageing, but general agreement that no single factor can fully explain the process. Most medical experts are of the view that ageing is caused by a complex combination of intrinsic influences (e.g. genetics) and extrinsic ones (such as exposure to certain environmental conditions). It follows that until it is properly understood how and why we age, then it is hard to treat it. Nonetheless, the opportunity is significant. There is huge potential scope to disrupt many major and interlinked markets: annually, $3tr is spent on healthcare, $1tr on pharmaceuticals and $4tr on insurance globally (per McKinsey).
Multiple (and non-mutually exclusive) strategies currently exist for delaying the ageing process. At the most basic, appropriate diet and exercise are generally considered to be positive strategies. Research from the University of Oxford suggests that three behaviours (poor diet, smoking and lack of exercise) cause 50% of the world’s deaths. Behavioural change may therefore have a greater impact on the overall health of the population than personalising therapies for individual patients. Beyond these strategies, however, there exist a range of pharmacological drugs designed to slow ageing as well as an emerging range of new therapies based around genomics and regeneration. Most of the action is occurring here at present, with the number of active longevity clinical trials reaching a new high in 2018 of 145, double the level of 2012 (per 13D Research). Finally, novel approaches such as blood rejuvenation and brain revitalisation are also being trialled.
Begin with pharmacological drugs and here a mixed group of products is currently available. These include statins, which are widely used to prevent heart attacks and strokes in people with high cholesterol; rapamycin, which is used to prevent the immune system from rejecting transplanted organs and to prevent blood clots from forming; and reservatol, which can slow the anti-oxidation (ageing) of cells. While popular in some quarters, each of these products tends to be limited by the fact that it might counteract just one of the multiple factors that cause ageing. Side effects occur in some patients too.
Most medical activity in the area of anti-ageing is currently centred around leveraging recent scientific developments. Consider that the cost to sequence a whole human genome has plummeted rapidly in recent years and is below $500 today. Correspondingly, some 12m DNA samples have been sequenced to-date (per Illumina), while the Broad Institute (a medical centre operated jointly by Harvard and MIT) expects that by 2025, some 1bn people globally may have had their DNA sequenced. At the same time, breakthroughs in CRISPR CAS-9 gene editing tools are proliferating. These allow a precise way to find, remove and replace genes. The potential of both the above developments is rendered more powerful by technologies such as machine learning and blockchain. The former can sift quickly through large amounts of human data to identify patterns of disease, while the latter can help secure the privacy of sensitive genomic information.
Against this background, there have been significant developments in multiple overlapping areas within the field of regenerative medicine. These include gene therapy, epigenetic therapy, stem cell research, organ regeneration and telomere extension. Gene therapy, put simply, relates to the insertion of certain genes into a person’s cells to prevent diseases. Meanwhile, epigenetic therapy relates to the process of artificially turning genes on or off; effectively changing the way in which they are controlled. Trials in this area are aimed at seeking to understand and hence avoid the occurrence of genetic mutations. At present, there are over 60 trials at least at a stage III level of development (i.e. relatively advanced) underway for extending the longevity of people with rare diseases (per Bloomberg); expect more.
Elsewhere, stem cell research is aimed at proliferating the number of cells with ‘repairing’ capacities within the human body. Trials on animals that have received stem cell therapies have seen their lifespans reportedly extended by up to 40% (per Celularity, a US biotech company). Others are working on organ regeneration. Lygenesis, a start-up spun out of the University of Pittsburgh, has developed a novel technology to use lymph nodes as mini-bioreactors. In 450 animal trials, the business has apparently achieved a 100% success rate for its treatment.
Looking further ahead, science and technology continue to push into new areas. Researchers at Harvard, for example, have demonstrated that a certain protein (GDF11) can make failing hearts in ageing mice appear younger and could also improve brain and skeletal muscle function. At the same time, scientists at Shanghai University have used micro-imprinting (a sophisticated version of 3D-printing) to develop a vascular graft. This could be thought of as an artificial blood vessel and could improve blood flow, particularly after bypass surgery. More radically, researchers at Stanford University are working on brain revitalisation (again through the introduction of specific proteins) and have achieved success in trials with mice.
Despite the excitement and the broad prize that might be available (beyond the large size of the industries that could be disrupted, consultants such as Orbis Research already value the anti-ageing market at over $40bn), a lot remains unknown. The whole topic of ageing and life extension remains controversial from both a medical and an ethical perspective. There is little consensus on many of the key issues and, as previously mentioned earlier, exactly how humans age is still not fully understood. Ultimately, there is unlikely to be one silver bullet. Researching ageing in humans naturally takes a long time, as changes happen slowly. Moreover, any success in delaying ageing might not necessarily mean that the period of ill-health before death would be shortened. An important distinction needs to be made between lifespan and healthspan.
There are many other important issues to consider too. It is still highly unclear to what extent regulators might approve any novel approaches. A recent paper published by the NHS in England stated that many anti-ageing interventions “still lack robust evidence that they are effective in humans.” Meanwhile, the FDA does not currently consider ageing to be a disease and so would be unlikely to approve drugs intended solely to treat ageing. A different consideration is whether insurers would pay for drugs to extend peoples’ lives, even were the overall medical cost of caring for people to decline should they remain healthier for longer. Extended lifespans would additionally imply a whole new approach to other areas. Current retirement policies could become obsolete, and solutions to a potentially underfunded pensions crisis would need to be addressed. Politicians and regulators may also wish to consider that were life extension technologies to become more widely available, then they may only widen inequalities between those who could and could not afford them. Finally, ethicists continue – perhaps justifiably – to ponder whether humanity has a right to engineer its own future.
New drugs take lengthy time to be approved and may not even succeed. Nonetheless, the amount invested in longevity start-ups has doubled in the last year, reaching $800m in 2017 (per Bloomberg), while the number of longevity-based clinical trials currently stands at record levels. For an investor, however, the challenge is knowing where best to allocate given the uncertain time horizons and possibility of failure. Many of the more exciting developments in the field are also, arguably, occurring in the private rather than the listed space. Universities and start-ups are pioneering much development, while certain other well-funded players are also active. Human Longevity (backed by Craig Venter and Peter Diamandis) is seeking to create the largest database of sequenced genomes in the world, while Calico and Verrily (both backed by Alphabet) have an explicit mandate to develop anti-ageing solutions, with substantial access to capital. While some major pharma businesses such as Novartis (owners of the rapamycin franchise) and Bristol Myers appear to have developed a relative early-mover advantage in the anti-ageing space, our preferred approach would be to focus on a business such as Illumina (the world leader in molecular diagnostic solutions for DNA testing) or Thermo Fisher (a leading manufacturer of scientific instruments used in life extension research).
Alexander Gunz, Fund Manager, Heptagon Capital
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