How to Invest in Genetics

Genetics Investing
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Genetics investing drives research that may ultimately prevent major illnesses, making it one of the most important life science fields.

Genetics is the study of genes, their variations and hereditary characteristics, as well as how these traits are passed on through generations. So what is genetics investing?

When it comes to genetics investing, companies in this niche of the life science sector are mostly focused on four areas: DNA sequencing, genetic testing, gene therapy and genomics, which includes genome editing.

Additionally, there are several major branches that make up the genetics tree: classical genetics, molecular genetics and evolutionary genetics. There are various other subcategories within those branches, all of which include genetics companies that market participants can invest in.

Here the Investing News Network provides a breakdown of each of these areas, looking at ways to invest in genetics and what could disrupt this ever-evolving market.

Genetics investing: Key areas

Before diving into investment opportunities in the genetics market, it’s important to understand the industry and the four key areas mentioned above. They are defined as follows:

  • DNA sequencing: According to the National Human Genome Research Institute, DNA sequencing involves determining the order of the four “bases” that make up DNA molecules. These chemical building blocks are adenine, guanine, cytosine and thymine, and determining their sequence allows scientists to understand what type of genetic information a section of DNA holds.
  • Genetic testing: The US National Library of Medicine defines genetic testing as testing that pinpoints changes in chromosomes, genes and proteins in order to diagnose a genetic disorder. There are thousands of genetic tests available, such as molecular genetic tests, chromosomal genetic tests and biochemical genetic tests.
  • Gene therapy: Gene therapy is an approach that uses a person’s genes to treat or prevent diseases. There are several different types of gene therapy, such as replacing a mutated, disease-causing gene with a healthy version of the gene, getting rid of a mutated gene that isn’t working properly and even introducing a new gene into the body to fight off diseases.
  • Genomics: Genomics is the overarching study of all of a person’s genes. It includes how those genes interact both with one another and with a person’s environment. Genome editing purposefully alters the DNA sequencing of a living cell.

Genetics investing: Market size

The DNA sequencing market is a rapidly growing industry. According to Reports and Data, the industry is projected to reach a whopping US$12.55 billion in value by 2028.

The firm states that the market for DNA sequencing is being driven by advances in healthcare infrastructure and research facilities, as well as increasing investment in research and development. DNA sequencing has become a vital component of this growth and has played a key role in remodeling molecular biology and genomics research.

“DNA sequencing is widely used in applications such as biomarker discovery, reproductive health, agrigenomics, forensics, and HLA typing, among others,” the report explains.

Genetic testing is another segment of the genetics industry that is growing at a fast pace. Unsurprisingly, technology has had a huge impact on genetic testing, and so has the fact that governments and regulatory bodies are turning their attention to this market in order to regulate and raise awareness.

A Global Market Insights report estimates that the genetic testing market will reach US$31.8 billion by 2027, fueled by an increase in the use of genetic testing for diseases such as cancer, cystic fibrosis and Alzheimer’s disease.

In the pharmaceutical sector, gene therapy is one of the more advanced treatment options, and gene therapy pipeline candidates are robust in late-stage clinical trials.

By 2028, Grandview Research estimates that the gene therapy market will be worth US$10 billion, growing at a compound annual growth rate (CAGR) of 20.4 percent from 2020 to 2028. The report attributes growth in this sector to increasing clinical trials for advanced cancer therapeutics to address the lack of effective treatments.

Finally, the global genomics market is seen reaching US$94.65 billion by 2028, achieving a CAGR of 19.4 percent from 2022 to 2028. As Fortune Business Insights notes, "the healthcare environment is steadily shifting from conventional treatment procedures towards accuracy medicine and has revolved this evolution through incomparable clinical possessions over the last few years.”

Biotech and pharmaceutical companies are also expressing interest in this sector, which is expected to further fuel genomics’ growth in the coming years.

Genetics investing: How to invest

For those looking to dive into the genetics sector, there are a wide range of investment opportunities to consider. Investing in stocks is the most common route, but there are risks due to the market’s volatility, especially when it comes to wins or losses with the US Food and Drug Administration (FDA).

Exchange-traded funds (ETFs) are another popular option for gaining exposure to the industry, and come with less risk than investing in a single stock. Here’s a look at stocks and ETFs to consider.

Genetics investing: Stocks

There are a number of large-cap companies for those looking for genetics behemoths. The list includes major players like Amgen (NASDAQ:AMGN), Vertex Pharmaceuticals (NASDAQ:VRTX) and BioNTech (NASDAQ:BNTX).

When it comes to genetic testing, there are several key stock options, including Exact Sciences (NASDAQ:EXAS), Guardent Health (NASDAQ:GH) and Invitae (NYSE:NVTA).

Gene therapy stocks are also a popular investment for genetics investing. These include companies like CRISPR Therapeutics (NASDAQ:CRSP), Voyager Therapeutics (NASDAQ:VYGR) and Bluebird Bio (NASDAQ:BLUE).

Some options for genomic stocks have already been mentioned, but Sarepta Therapeutics (NASDAQ:SRPT) and Veracyte (NASDAQ:VCYT) are also companies to consider.

Genetics investing: ETFs

For those that would prefer to invest in the industry overall rather than an individual stock, ETFs are the way to go. Examples of genetics ETFs on the market include:

  • Ark Genomic Revolution ETF (ARCA:ARKG): This ETF tracks firms focused on CRISPR technology, targeted therapeutics, bioinformatics, molecular diagnostics, stem cells and agricultural biology.
  • Global X Genomics & Biotechnology ETF (NASDAQ:GNOM): This ETF invests in stocks that are involved in genomic science, which includes gene editing, genomic sequencing, genetic medicine and therapy, computational genomics and biotechnology.
  • iShares Genomics Immunology and Healthcare ETF (ARCA:IDNA): The focus of this ETF is companies involved with genomics, immunology and bioengineering.

Genetics investing: What’s next

In terms of what will — and already has — disrupted the genetics industry, CRISPR technology has been on the rise for quite some time. CRISPR technology makes use of short repeating DNA sequences with “spacers” dividing them in an effort to treat genetic disease.

There are a range of clinical trials underway involving CRISPR technology. “It’s a whole new era of medicine, ” remarked Daniel Anderson, a biomedical engineer at the Massachusetts Institute of Technology in Cambridge.

CRISPR technology may be in its early stages, but in the coming years it’s expected to have a big impact on how genetic diseases are treated. Quince Market Insights reports that this segment was worth US$900.21 million in 2021 and is expected to increase by a CAGR of 23.8 percent between 2021 and 2030.

As can be seen, the genetics industry is vast and complex, but is also ripe with investment opportunities.

This is an updated version of an article originally published by the Investing News Network in 2015.

Don’t forget to follow us @INN_LifeScience for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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