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July 20, 2011 - Freedomain Radio - Stefan Molyneux

14:05

1958 Alex Daley: On Curing Cancer - Conversations with Casey

Stefan Molyneux interviews Casey's own Alex Daley on finding the cure for cancer and the Bio-tech companies pursuing it.

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	Hi everybody and welcome to Conversations with Casey.
	I'm your host Stefan Molyneux And on today's show, we have Alex Daly, Chief Technology Investment Strategist at KC Research and editor of KC Extraordinary Technology.
	Thank you so much for taking the time, Alex.
	Well, thank you for having me on.
	So, you have become somewhat of an expert, I would suggest, in biotech and medically related fields.
	I was wondering if you could talk a little bit about some of the enormous changes, particularly since the end of the Genome Project in 2000, that have occurred in this sector and where you think it's going.
	Sure. Biotech's a really interesting sector these days.
	I mean, everybody remembers the sequencing of the Human Genome Project just over a decade ago as a huge milestone, but then for the most part, you know, it was supposed to usher in the era of genetic medicine and new cures and all of that, but it actually ends up that there's a lot of work to be done In the time from understanding what composes the genome to understanding how it works.
	And only now, a decade plus later, are we getting to the point where we're starting to have insight into the genetics of the body, the genetics of certain diseases, in particular of cancer is one of the most interesting places, where work on biotechnology in general, understanding what proteins kind of make cancer tick, what genes make it behave different from the rest of the body.
	How we can fight cancer using the immune system, using the chemicals that help it operate, and attacking it both at a physical level and the genetic level.
	It's really been a big set of advancements over the past decade in the research lab, and these advancements are just now coming to the edge of commercial markets.
	So there's obviously been advancements in detection and treatment and a way of focusing some of the radiation treatments and chemotherapy that have occurred.
	What do you think are the most exciting technologies that you see coming down the pipe to help people dealing with this dread disease?
	Well, what's most interesting about cancer is if you think back to say 1975 and you walked into a hospital and you were diagnosed with cancer, generally the treatment regimen is going to go very similarly.
	They're going to take biopsies, they're going to study the biopsies, they're going to provide you with radiation therapy or chemotherapy or some combination of the two.
	You look back to 1985, a decade later, pretty much looks exactly the same.
	1995, even 2005, not much has changed.
	Now, suddenly, in the last few years, we're starting to see interesting therapies in market.
	You look at drugs like Doxol, which is a liposomal delivery mechanism for chemotherapy.
	It helps us deliver the chemicals to the cells in a much more targeted way.
	One of the big problems with radiation therapy and chemotherapy both is you're talking about using toxic materials, toxic waves in the case of radiation therapy that do damage to the cells around cancer.
	There was no easy way until now for physicians to target those therapies.
	Now in the last few years we've seen the advent of a couple of really interesting technologies.
	The first is this kind of liposomal delivery, which helps us get chemotherapy a little more targeted to cancer cells by embedding it actually within fat molecules that are more targeted delivery.
	It's sort of step one, if you will, in terms of targeting the cancer without targeting the rest of the body.
	And we've seen similar advancements in radiation as well.
	You look at systems like the CyberKnife, Which is much more highly concentrated doses of radiation, but in much more accurate areas.
	So when you're dealing with sensitive surgeries, such as prostate cancer surgery, then you really want to use one of these more accurate systems.
	Still though, even with the CyberKnife, radiation tends to run all the way through the human body.
	It does damage in front of and behind the cancer cells, even if you can protect against lateral side-to-side damage with more accuracy.
	We're seeing advancements like proton therapy, where not just the width of the beam can be controlled, but actually the length, where we can actually target the cancer and not damage the cells behind it necessarily if it's operated correctly.
	These are all big advancements.
	We're starting to see to a point where we can treat cancer, especially cancer that's detected early, more effectively, but ultimately they don't change the fundamental science.
	I think what's most interesting is that we're now getting to a point where we can take that targeted delivery to the next level and then also not just deliver chemotherapy and radiation, but even deliver new substances into cancer, proteins that can directly combat it with much less toxicity.
	It sort of struck me that in a similar way that modern warfare has developed to trying to find insurgents who are blending with the local population and being unable to use the larger types of weapons, it seems that that's sort of where cancer is going.
	The cancer cells are sort of like the insurgents that blend in with and bond with existing cells.
	And trying to find them and target them seems to be, we know how to kill them, it's actually trying to find them and target them that is the greatest challenge.
	You're exactly right, Stefan.
	It's a large part is that cancer is your own body.
	It's a mutation. It's a genetic disorder, but ultimately the difference between a cancer cell and a normal cell is so minuscule that it makes them very hard to target and very hard to detect.
	Now, the advancement of biotechnology and genetic sequencing in particular has made it much, much easier for scientists to identify those minute differences and start to experiment with ways to target them.
	Let me give you a very good example.
	For many years now, there's been a technology out there called monoclonal antibodies.
	The idea is simple. Our bodies have a natural immune mechanism to build these antibodies which can deliver proteins into cells to help attack disease.
	Our body can manufacture them very specifically to attack a specific type of bacteria or to even attach to one of our own If we can develop, and we have been for many years, these antibodies in a lab and develop just a very specific one,
	that's what the word monoclonal means, just that we're going to have one very specific, exactly identical antibody produced at scale, then we can actually use those antibodies to deliver chemotherapy or radiation directly to cancer cells by developing antibodies that only target That's one of the big advancements that's now in early clinical stage testing from one of the companies in the Casey's Extraordinary Technology portfolio.
	We actually have about five companies in the portfolio today that are attacking cancer in various different ways.
	Each of the companies has a unique approach, whether that's the case of the monoclonal antibodies, just being better at targeting The cancer with existing types of therapies or whether it's some of the more advanced techniques we're seeing out of companies that are targeting a specific signaling pathways or genetic behaviors of cancer itself.
	I'd like to really focus in on some of the investment challenges in biotech.
	Now, this is with all due sensitivity to the fact that we're talking dollars and medicines, which is sometimes difficult for people.
	But clearly, when a drug takes half a billion to a billion dollars to get through to market, you need a lot of cash.
	And the wise investor, I believe, is also doing a very benevolent service to mankind when he is picking a winner in the biotech industry where, as you've pointed out, 90% of the firms are heading straight to the dustbin and taking a lot of talent with them.
	What are some of the things that investors can do to help focus in on finding the highest value, most beneficial, most health promoting kinds of biotech companies?
	Yeah, I mean, you're absolutely right.
	As an investor, you're doing a crucial part in actually helping fight cancer itself.
	I mean, it's one of the wonderful things about the free market and the capitalist system is that there's a need here.
	I mean, there's a real honest human need to cure these diseases, and it presents a market opportunity and an incentive for scientists who both want to do the right thing and believe that they can make a profit in the world.
	Pursuit of a cure for cancer, and it's really led to a boom in funding.
	What's most interesting, I think, about technology investing is, you know, the most recent complaint from the average investor about technology is all the best deals are private, right?
	You can now raise $50 million, $100 million, even $200 million from venture capitalists and investment banks and private rounds.
	It becomes very hard for the latest and greatest to make it to public markets.
	In the US in particular, regulations have become so severe that bringing an early pre-revenue biotechnology company to market or any technology company to market has a lot of implications in terms of cost.
	But now, when you start talking about things like targeting cancer, you can be talking about testing a therapy in dozens or hundreds of patients.
	At a cost of, you know, hundreds of millions to even over a billion dollars to make it through the regulatory hurdles, to get FDA clearance to prove that the therapy is both safe and effective.
	It can be at an extreme cost, and no investor is willing to shoulder that burden of a billion dollars for a drug that maybe has a 10% or even less chance of making it to market.
	But what smart investors have been doing in biotech has been spreading the risk around.
	Large biotech and pharmaceutical companies are putting more joint development agreements together with startups as opposed to acquiring them directly, allowing venture capitalists and even public market investors to participate with them.
	So what's interesting about cancer in particular is one of the most expensive diseases to test through clinical trials There's a great deal of need for large sums of money, and that means public markets, which means a fantastic opportunity for individual investors.
	But there's real risks there. Whenever you're dealing with biotechnology, you're generally dealing with early stage pre-revenue companies.
	There's no guarantee that their therapy will make it from phase 1 testing to phase 2 testing to phase 3 and then to mark it without some kind of problem being discovered, without discovering that maybe it's not quite as effective as thought once it's tried in the field.
	Some things look great in a test tube, but put it in the human body and it's either wreaking havoc on the system or it's just simply not as effective as it once appeared to be.
	So we tend to focus our efforts on sort of mid-stage biotechnology companies.
	We can look at the science, we can look at the peer-reviewed literature, we can see how these therapies have behaved in a small number of humans in trials, and we can say, all right, these things are looking effective and they're looking safe, and we're at a point now where a company needs a significant amount of cash inflow in order to bring the And that's what's really interesting for investors is if you can find those mid-stage companies and you can really understand the science well and understand what they're doing,
	what they've been testing, then you can actually provide yourself a little bit of an advantage over the institution.
	We're looking for that solid revenue stage company.
	They're doing screens on PE ratios and looking for revenue growth.
	You're really looking at that early startup where you're willing to take a risk based on good science, based on good data, and take an investment that can provide 10 or 15 or 20 times return because you're willing to put in your money early on.
	Right, right. Now, I think we're all very interested in trying to get as much intelligent investor money channeling towards the companies that have the highest potential success rate in treating these illnesses.
	So I was wondering if you could talk a little bit about the resources that Casey Research has available to investors who want to, you know, make money and I think secure a safer and healthier future for themselves.
	Yeah, absolutely. I mean, KC Research has a long history, three decades of legacy now, focusing on niche markets where it can bring the expertise to bear to really start to understand the market, know the players in the market, get the science in the case of, you know, We have access to the geologists and network of explorers and financiers who really understand that industry and help us evaluate the opportunities out there.
	And we have some of the best people on staff to make investing decisions and to help find source deals and guide our subscribers on how to navigate those markets.
	We've done the same thing with technology.
	I head up the technology division here.
	We have a team of analysts who focus on looking at the companies, finding companies that have a strong financial position, that have good management, and ultimately that have good technology.
	I've been in the technology industry for my entire career.
	I will continue to stay in the technology industry for my entire career.
	I work with networks of venture capitalists and angel investors.
	I go to all the major scientific conferences and try to understand what's moving forward.
	Sit down, Talk to the scientists and just have a candid conversation about what's working and what's not in the lab.
	And from there, we find our best investment opportunities.
	Now, we focus not just exclusively on biotechnology, but as well on other technology.
	You'll find that in the pages of Extraordinary Technology, we cover security technologies, we cover semiconductors, internet, software, e-commerce type technologies, networking systems, hardware.
	You name it. We cover across the board.
	And it's because we have a great resource, a great network of industry contacts who we can lean on to really help us understand what's going on in the market and help us turn that into actionable investment advice for our subscribers.
	Good stuff. And again, to reiterate to listeners and watchers, this is one of the few areas in biotech where you are making money, which is a good thing, and creating future health opportunities for everyone, which is also a very good thing.
	It really is a win-win negotiation.
	So thank you so much for taking the time, Alex.
	Just a reminder, he is the Chief Technology Investment Strategist at Casey Research.
	Thank you so much for taking your time.
	This has been Conversations with Casey.

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