Technology and biotechnology are the two seminal investment themes of this century. And while many tech companies have seen share prices rise 100-fold or more since the millennium, biotech and its parent big pharma have barely moved the needle. That is about to change.
You can thank the convergence of big data, supercomputing, and the sequencing of the human genome, which overnight, have revolutionized how new drugs are created and brought to market. So far, only a handful of scientists and industry insiders are in on the new game. Now it’s your turn to get in on the ground floor.
The first shot was fired in December 2017 when CVS (CVS) bought Aetna (AET) for an eye-popping $69 billion, puzzling analysts. A flurry of similar health care deals followed, with Berkshire Hathaway (BRK-A), Amazon (AMZN) with its Verily start-up, and J.P. Morgan (JPM) joining the fray. March followed up with a Cigna (CI) bid for Express Scripts, a pharmacy benefits manager. Apple (AAPL) has suddenly launched a bunch of health care-based apps designed to accumulate its own health data pool. What’s it all about? Or better yet, is there a trade here? No, it’s not a naked bid for market share, or an attempt to front run the next change in health care legislation. It’s much deeper than that. In short, it’s all about you, or your personal data to be more precise.
We have all seen those clever TV ads about IBM’s (IBM) Watson supercomputer knowing what you want before you do. In reality we are now on the third generation of Watson, known as Summit, the world’s fastest super computer. By the way, Summit uses thousands of Nvidia (NVDA) graphics cards, which is yet another reason why I love that company. Summit can process a mind-numbing 4 quadrillion calculations per second. This is the kind of computing muscle power that you once associated with a Star Trek episode.
Financed by the Department of Defense to test virtual nuclear explosions and predict the weather (that’s why we signed the nuclear test ban treaty), Summit has a few other tricks up its sleeve. It can, for example, store every human genome and medical record of all 330 million people in the United States, process that data instantly, and spit out miracle drugs to cure any disease almost at whim.
