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Impact investing: the blood test that could screen early-stage cancers

Regnan’s impact investment team believes ‘liquid biopsy’ technology could grow into a $US20 billion to $100 billion market. Regnan analyst Maxine Wille explains

A BLOOD test that can diagnose and monitor the progression of cancer and other diseases?

It’s possible.

So-called “liquid biopsy” technology has its origins as far back as the 19th century when scientists first detected tumour cells in the bloodstream.

Recent advances in DNA sequencing technology mean the technique now has the potential to revolutionise medicine — and that’s attracted the attention of Regnan’s impact investing team.

Impact investing aims to generate both a financial return and a positive impact on society.

Liquid biopsy is just one emerging diagnostics innovation that Regnan believes can enable a transition towards a more proactive and preventative healthcare model.

“Under this vision, ailments such as cancers may one day be caught through regular broad-based screening tests, rather than invasive biopsies that target a specific pathogen,” says senior Regnan fund manager Tim Crockford in the latest Regnan Global Equity Impact Solutions report.

New advances

Liquid biopsy is “the pinnacle of promise in clinical diagnostics”, says Maxine Wille, an investment analyst in Regnan’s Equity Impact Solutions team.

“It’s a non-invasive test. If the promise holds true it will not only help guide treatment decisions for insidious diseases like cancer, it also might be used as a screening tool at a very early stage to diagnose and treat cancers before they spread.”

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Regnan Global Equity Impact Solutions Fund

Diagnostics forms 70 per cent of clinical decision-making, but it has not attracted commensurate investment in the past, says Wille.

“That’s changed as a result of the pandemic which put diagnostics — and the value it creates — into the limelight,” she says.

“The promise of liquid biopsy specifically is you can now diagnose potentially up to 50 different types of cancers from a single blood draw — that’s why it’s very exciting and why we have decided to take an in-depth look at the sector,” she says.

How it works

Liquid biopsy technology aims to replace — or at least complement — the tissue-based biopsy that dominates diagnostics.

Tissue-based biopsy involves physically removing cells for investigation — typically with a scalpel or needle. It is often an intrusive process that can be painful, takes time and comes with risk.

Tissue-based biopsy has important medical limitations too. It is not easily repeated which makes it hard to monitor the progress of a disease. And the sample of cells collected is limited to the place where the biopsy was taken, meaning the test can miss things.

By contrast, liquid biopsies are non-invasive, requiring only a blood sample. They generate a complete genetic profile of a disease, and they allow repeat testing at fast turnaround times, which is critical for determining treatment efficacy.

Billion-dollar potential

Cancer remains one of the world’s deadliest and fastest-growing diseases, says Wille.

It’s responsible for one in six deaths worldwide, 70 per cent of which occur in low-to-middle-income countries, according to the WHO.

Wille says estimates for the size of the liquid biopsy market range from $US20 billion to $US100 billion. The current in vitro diagnostics market is estimated at $US60 billion.

Still, there are challenges. Early diagnosis of cancers is only useful if there are effective treatments available.

“You have to look at the investment potential from the diagnostic side but also watch how quickly the treatment landscape is evolving.”

And it is unclear if insurers and governments are willing to fund pan-cancer screening tests across asymptomatic populations.

Opportunities

But the rapid technological advances are creating exciting opportunities for investors seeking to invest in businesses that address underserved global challenges.

“We invest in companies that contribute to the UN sustainable development goals (SDGs) and one of them is health and well-being,” says Wille.

“But health is also among the most ambiguous of the SDGs — the solutions that can be invested in to meet that goal are very, very broad which means investors need to be very selective in terms of identifying good stocks.”


About Maxine Wille

Maxine is an investment analyst with Regnan’s impact equity team, which manages the Regnan Global Equity Impact Solutions Fund. Maxine previously worked with Hermes’ Impact Opportunities Equity Fund.

About Regnan

Regnan is a responsible investment leader with a long and proud history of providing insight and advice to investors with an interest in long-term, broad-based or values-aligned performance.

Building on that expertise, in 2019 Regnan expanded into responsible investment funds management, backed by the considerable resources of Pendal Group.

The Regnan Global Equity Impact Solutions Fund invests in mission-driven companies we believe are well placed to solve the world’s biggest problems.

The Regnan Credit Impact Trust (available in Australia only) invests in cash, fixed and floating rate securities where the proceeds create positive environmental and social change. Both funds are distributed by Pendal in Australia.

Visit Regnan.com

Find out about Regnan Global Equity Impact Solutions Fund

Find out about Regnan Credit Impact Trust

For more information on these and other responsible investing strategies, contact Head of Regnan and Responsible Investment Distribution Jeremy Dean at jeremy.dean@regnan.com.


This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at March 2, 2022.

PFSL is the responsible entity and issuer of units in the Regnan Global Equity Impact Solutions Fund (Fund) ARSN: 645 981 853. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund.

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