Gut-check alert: Don’t take your microbiome for granted. Seriously! And some gut-wrenching stock picks.

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The News:

Last month it was quietly reported that scientists working on the gut microbiome have discovered and isolated more than 100 completely new species of bacteria from healthy people’s intestines. Science Daily says the study has created the most comprehensive collection of human intestinal bacteria to date. The new resource will help researchers worldwide to investigate how our microbiome keeps us healthy and its role in disease.

The study from the Wellcome Sanger Institute, Hudson Institute of Medical Research, Australia, and European Molecular Biology Laboratory’s (EMBL) European Bioinformatics Institute, has created the most comprehensive collection of human intestinal bacteria to date. This will help researchers worldwide to investigate how our microbiome keeps us healthy, and its role in disease, says Science Daily.

Reported February 4, 2019 in Nature Biotechnology, the new resource will allow scientists to detect which bacteria are present in the human gut, more accurately and faster than ever before. This will also provide the foundation to develop new ways of treating diseases such as gastrointestinal disorders, infections and immune conditions.

A little-known fact is that about 2% of a person’s body weight consists of bacteria and the intestinal an essential contributor to human health. Imbalances in our gut microbiome can contribute to diseases and complex conditions such as inflammatory bowel disease, irritable bowel syndrome, allergies and obesity. However, since many species of gut bacteria are extremely difficult to grow in the laboratory, there is an enormous gap in our knowledge of them.

In this inquiry, researchers studied fecal samples from 20 people from the UK and Canada and successfully grew and DNA sequenced 737 individual bacterial strains from them. Analysis of these strains revealed 273 separate bacterial species, including 173 that had never previously been sequenced. Of these, 105 species had never even been isolated before.

Dr. Samuel Forster, first author on the paper from the Wellcome Sanger Institute and Hudson Institute of Medical Research, Australia, said:

“This study has led to the creation of the largest and most comprehensive public database of human health-associated intestinal bacteria. The gut microbiome plays a major role in health and disease. This important resource will fundamentally change the way researchers study the microbiome.”

Standard methods to understand how the gut microbiome impacts human health involves sequencing the DNA from mixed samples of gut bacteria to differentiate and understand each component. However, these studies have been severely hampered by the lack of individually isolated bacterial strains and reference genomes from them.

The new culture collection and reference genomes will make it much cheaper and easier for researchers to determine which bacteria are present within communities of people and ascertain their role in disease.

Dr. Rob Finn, an author from EMBL’s European Bioinformatics Institute, said:

“For researchers trying to find out which species of bacteria are present in a person’s microbiome, the database of reference genomes from pure isolates of gut bacteria is crucial. Then if they want to test a hypothesis, for example that a particular species is enriched in a certain disease, they can get the isolate itself from the collection and physically test in the laboratory if this species seems to be important.”

Dr. Trevor Lawley, Senior author from the Wellcome Sanger Institute, said:

“This culture collection of individual bacteria will be a game-changer for basic and translational microbiome research. By culturing the unculturable, we have created a resource that will make microbiome analysis faster, cheaper and more accurate and will allow further study of their biology and functions. Ultimately, this will lead us towards developing new diagnostics and treatments for diseases such as gastrointestinal disorders, infections and immune conditions.”

Steve’s Take:

I must admit that reading and writing about the gut microbiome has always made me a bit queasy. Especially when I hear about fecal transplants, notwithstanding that I recognize this often is a life-saving treatment for patients whose healthy gut bacteria have been wiped out by say, antibiotics and/or chemotherapy, for example.

Labiotech.eu.’s Clara Rodriguez Fernandez recently wrote an incredibly useful primer on the gut-microbiome. I am borrowing from much of her peace, having only recently become aware of this niche sector of biotechnology that’s been shoved into the backseat of medical breakthroughs by checkpoint inhibitors (Keytruda, Opdivo) and CAR T cell therapies (Kymriah).

Fernandez points out that scientists are uncovering many ways that the microorganisms that share our body can influence our health. It appears as though the human microbiome could be the key to treating a wide variety of diseases, Fernandez notes, but how can we make these tiny creatures collaborate with us?

We’ve all been told that our DNA is what makes us what we are. What many (including yours truly until now) don’t realize is that that DNA does not come exclusively from our own human cells. It also comes from the millions of microbes that live on our skin, inside our gut, and pretty much everywhere in the human body. Their genes outnumber ours by 150 times, and I am personally awestruck that nearly 3 ½ pounds (2% of total bodyweight) of these mostly friendly organisms inhabit me.

Some scientists refer to them as our “second genome,” and some even consider them one more of our organs. The term microbiome was coined by Nobel Laureate Joshua Lederberg.

Dr. Lederberg described it as “the ecological community of commensal, symbiotic, and pathogenic microorganisms that literally share our body space and have been all but ignored as determinants of health and disease.”

In the last decade, however, scientists are becoming aware of the potential of the human microbiome.

“It has become evident through research that the microbiota that humans carry have a significant impact on human health,” Lee Jones, founder and CEO of Rebiotix Inc. (Roseville MN), told Fernandez.

Ms. Lee’s company, recently acquired by the Swiss-based Ferring Pharmaceuticals SA (Saint-Prex), is one of many that seek to exploit “our tiny life partners to treat disease.”

The potential seems boundless–and nowadays portends a goldmine for biotech/pharma developers and investors. Why? Because the human microbiome has been linked to many disease conditions, ranging from inflammatory bowel disease to diabetes, multiple sclerosis, autism, cancer and AIDS. This has created an explosion in microbiome research.

“The technologies that allow us to analyze this impact have improved at an exponential rate, making discovery much easier than even five years ago,” said Jones.

However, understanding the complexity of the microbiome is still a big challenge. Its composition is unique to each person and changes through life as does our environment, says Fernandez. The human microbiota can be affected by many factors ranging from diet–for example, vegans and vegetarians have a distinct gut microbiome–to exercise habits, age and location, just to name a few.

Where will the microbiome have the most clinical impact?

In 2018 alone, over 2,400 clinical trials were testing therapies based on microbiome science. That number is growing quickly, by comparison, there were just 1,600 trials the previous year, according to a report by Seventure Partners, a French VC investor with the first fund in the world to be exclusively dedicated to microbiome companies.

Bottom Line:

Drugmakers are still determining how to use bacteria to develop therapeutics, while researchers are trying to identify what the presence or absence of certain strains can mean for overall human health. Because of the field’s adolescence, estimates on future growth vary. A report from MarketsandMarkets estimates the microbiome market could reach $635.8 million by 2022, while a different report from Transparency Market Research says it could reach $1.7 billion by 2024.

As microbiome research has grown, more health conditions have been linked to having an unbalanced microbial composition–something dubbed dysbiosis.

“It all started with the gastrointestinal indications, and the metabolic indications,” Isabelle de Cremoux, CEO of Seventure, told Fernandez. “Then we saw innovations applied to the field of autoimmune and immune diseases. Then skincare popped up and more recently the gut-brain axis and oncology are gaining momentum.”

Although the microbiome can be disruptive in all these fields, de Cremoux believes that, from a market perspective, oncology has the biggest potential.

It is known that some microorganisms render cancer drugs ineffective, whereas others are actually necessary to make these drugs work. This means that having the right microbiome might massively improve the chances of a person surviving cancer.

“The gut microbiome has emerged as an important target in cancer therapy to repair the microbiome following harsh chemotherapy and antibiotic treatment regimens to improve patient survival,” de Cremoux notes.

We see also more and more correlation between the microbiome and immunotherapy’s efficacy and most recently in cellular therapies,” said Hervé Affagard, CEO of MaaT Pharma. This Paris-based company aims to improve the chances of patients with leukemia by restoring a healthy microbiome after being disrupted by chemo and antibiotics.

Here are some of my suggestions for companies specializing in microbiome research and drug development whose stock you can buy on the NYSE & Nasdaq. Included is a summary of how analysts rate them and their 12-month price targets.

1) Synthetic Biologics Inc. (“SYN”) Current stock price (CP) = $0.65; Mean consensus (MC) = Buy; Average 12-month target price (ATP) = $3.63; spread to ATP = 449%
2) Ritter Pharmaceuticals Inc. (“RTTR”); CP = $0.95; MC = Outperform; ATP = $7.50; spread to ATP = 752%
3) Assembly Biosciences Inc. (“ASMB”) CP = $18.93; MC = Buy; ATP = $65.00; spread to ATP = 222%
4) Qiagen NV (“QGEN”) CP = $39.15; MC = Outperform; ATP = $39.60; spread to ATP = 44%
5) Seres Therapeutics Inc. (“MCRB”) CP = $6.15; MC = Outperform; ATP = $14.60; spread to ATP = 130%
6) Synlogic Inc. (“SYBX”) CP = $7.98; MC = Buy; ATP = $19.80; spread to ATP = 130%

(N.B. The above names are only for the portfolio with a constituent designated specifically for high-risk tolerance)

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