Cathie Wood founded Ark Invest in 2014 to provide investors exposure to what she calls "disruptive innovation," a strategy that encompasses artificial intelligence, energy storage, blockchain technology, robotics and gene editing.
While Ark's flagship Innovation ETF is largely exposed to Wood's chosen AI and cryptocurrency plays, Ark has invested plenty of capital into a variety of biotech firms across its funds.
Related: Cathie Wood has a blunt warning for the future of Google's stock
And while Ark's Genomic Revolution ETF is led by massive holdings in Exact Sciences (EXAS) -), Crispr Therapeutics (CRSP) -) and Pacific Biosciences of California (PACB) -), the fund recently snapped up 476,066 shares in Personalis (PSNL) -), a genomics company focused on revolutionizing the world of cancer treatment and diagnostics.
This latest purchase boosted Ark's Personalis holding to 6,168,106 shares, worth a little more than $7 million and weighted at .45% of the fund.
Shares of Personalis, down more than 40% for the year, fell around 8% at last check Wednesday. Like many biotech firms, it represents a longer-term bet for Wood.
Personalis is working to change cancer treatment
Courtesy of Personalis
Founded in 2011, Personalis' mission is to change the oncology diagnostic and treatment process through genetic personalization. On the treatment side, Personalis is currently working with Moderna to enhance the latter's pioneering development of mRNA-based patient-specific cancer vaccines.
Such vaccines allow each patient's immune system to fight its specific tumors more aggressively, but the crux of this effort necessitates a highly personalized understanding of each patient's tumor biology.
Personalis has been deploying technology to achieve that understanding, and providing Moderna and other personalized cancer vaccine companies the blueprints to develop these personal treatments.
The process, the company's president and CEO Chris Hall told TheStreet in an interview, involves Personalis taking a tumor sample from a patient and running it through sequencers, then using those sequencers to characterize an individual tumor, finding the unique, individual variants that make up that tumor.
To do this work at scale, Hall said that Personalis has invested significantly in automation; its new 100,000-square-foot facility in Silicon Valley combines cutting-edge lab technology with robotics.
"We do a deeper sequencing than anyone else with whole genome sequencing, which are able to characterize a lot more than what anyone else has done before us, which we think is important to be able to find some of the nooks and crannies to really nail this question of finding all the cancers," Hall said.
Personalis also works in minimal residual disease (MRD) detection, which refers to cancer cells that might remain in the body after treatment. The company developed what Hall called "the most sensitive test on the market," to detect such cancers early — Personalis announced a partnership with AstraZeneca in March to further explore its efforts in this arena.
Related: Cathie Wood snaps up nearly 4 million shares of a surging, cheap stock
Third quarter results
Reporting third-quarter results on Nov. 7, Personalis posted revenue of $18.2 million for the quarter, a 23% year-over-year increase. The company reported a net loss of $29.1 million.
Personalis said in a statement that it expects to see at least $73 million in revenue for 2023, with a net loss of $103 million.
The average analyst price target for the stock is $4.7. The company's analyst rating consensus is a "buy."
From an investor perspective, Hall said, many of the company's biggest investments — in lab tech, robotics, automation, workspaces, etc. — have already been made, which sets the company up for growth.
"We've built the products. We've scaled the lab. We've shown clinical evidence," Hall said, noting the company's success in identifying lung cancer in patients, a notoriously difficult cancer to detect. "In our industry, you've got to get insurance companies to pay for something. And that's a journey of building evidence. We're building that evidence, but that's the last real risk point for the company."
Courtesy of Personalis
Personalis, Hall said, will really start to grow once it can secure payment for its tests.
Hall said that within the next three to five years, Personalis will be "well on our journey," with its sequencing technology in use by oncologists, helping both in treatment and diagnosis.
Hall said that that Personalis will start to have the evidence that its approach is "possibly saving lives by finding the recurrence early, " but also saving patients and insurance companies money by identifying low-risk patients and de-escalating their treatments, something that would improve patients' "quality of life."
"That's where we're going," he said, "and I think in three to five years, that's that's where we'll be."
Related: Cathie Wood explains why she cut Ark's Tesla holding
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