Alger On the Money, A View on the U.S. Market

by Alger, a La Française partner firm

La Française AM Finance Services, in accordance with the terms of an agreement signed with Alger Management, Ltd, is a distributor of the Alger SICAV in Europe.

Fixing the Building Blocks of Life

Optimism about genetic and cellular medicine has surged as vaccines utilizing messenger RNA (mRNA) rapidly curtail the Covid-19 pandemic. Yet even before Covid-19, new technologies had sparked rapid and sustainable growth of novel therapeutics and accelerating demand for companies that provide life sciences tools and other services needed to develop, manufacture and distribute innovative medical treatments.

• Revenue for cell and genetic therapeutics is forecast to grow at a 40% compound annual growth rate and reach $33 billion by 2024. These regenerative therapies include editing genes and replacing cells such as T cells that attack cancer. While the most well-known application may be mRNA that instructs cells to create antigens that induce Covid-19 antibodies, other therapies that edit cells with CRISPR technology¹ are promising. Already CRISPR is being used to contain malaria in mosquitos and may ultimately be effective in treating hemophilia, cystic fibrosis and cancer. Additionally, CRISPR recently contributed to very favorable Phase I trial data for a rare genetic disorder in humans, the first such evidence that it can be deployed directly into the bloodstream to treat disease.

• Growth is being supported, in part, by technology becoming more affordable. In 2008, it cost $1,000,000 to conduct genetic sequencing. It has since dropped to below $1,000. The development of safer viral vectors that deliver instructions to correct problems with cells or DNA is also supporting the growth of regenerative therapy while demand for better treatments for cancer, immunodeficiencies, central nervous system disorders and other ailments is pervasive.

• Rather than focus on firms that may have their success tied to a single unproven treatment, we prefer to examine businesses with products that support multiple companies that are developing regenerative medicine. These products include materials for producing medical treatments, cloud-based technology for tracking clinical trials, specialty logistics such as refrigerated transportation, research equipment and manufacturing of medical treatments.

¹CRISPR technology is a tool for editing genomes. It allows researchers to alter DNA sequences and modify gene function.

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Compound annual growth rate is the rate of return that would be required for a quantity to grow from its beginning balance to its ending balance.

The views expressed are the views of Alger Management, Ltd. and its affiliates as of July 2021. These views are subject to change at any time and may not represent the views of all portfolio management teams. These views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

Important Disclosures: This document is directed at investment professionals and qualified investors (as defined by MiFID/FCA regulations). It is for information purposes only and has been prepared and is made available for the benefit of investors. This document does not constitute an offer or solicitation to any person in any jurisdiction in which it is not authorised or permitted, or to anyone who would be an unlawful recipient, and is only intended for use by original recipients and addressees. The original recipient is solely responsible for any actions in further distributing this document and should be satisfied in doing so that there is no breach of local legislation or regulation. This document is not for distribution in the United States.

Data, models and other statistics are sourced from our own records, unless otherwise stated herein. We caution that the value of investments in discretionary accounts, and the income derived, may fluctuate and it is possible that an investor may incur losses, including a loss of the principal invested. Investors should ensure that they fully understand the risks associated with investing and should consider their own investment objectives and risk tolerance levels. Past performance is not indicative of future performance. Investors whose reference currency differs from that in which the underlying assets are invested may be subject to exchange rate movements that alter the value of their investments.

Certain products may be subject to restrictions with regard to certain persons or in certain countries under national regulations applicable to such persons or countries. NOTABLY, THIS MATERIAL IS EXCLUSIVELY INTENDED FOR PERSONS WHO ARE NOT U.S. PERSONS, AS SUCH TERM IS DEFINED IN REGULATIONS OF THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT) AND WHO ARE NOT PHYSICALLY PRESENT IN THE UNITED STATES.

Risk Disclosure: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Local, regional or global events such as war, acts of terrorism, the spread of infectious illness such as COVID-19 or other public health issues, recessions, or other events could have a significant impact on investments. Healthcare and technology companies may be significantly affected by competition, innovation, regulation, and product obsolescence, and may be more volatile than the securities of other companies.

Important Information for All Investors: Alger Management, Ltd. (company house number 8634056, domiciled at 78 Brook Street, London W1K 5EF, UK) is authorised and regulated by the Financial Conduct Authority, for the distribution of regulated financial products and services. Fred Alger Management, LLC (“FAM”) and/or Weatherbie Capital, LLC, U.S. registered investment advisors, serve as sub-portfolio manager to financial products distributed by Alger Management, Ltd.

Alger Group Holdings, LLC (parent company of FAM and Alger Management, Ltd.), is not an authorized person for the purposes of the Financial Services and Markets Act 2000 of the United Kingdom (“FSMA”) and this material has not been approved by an authorized person for the purposes of Section 21(2)(b) of the FSMA.

Important information for Investors in Israel: This material is provided in Israel only to investors of the type listed in the first schedule of the Securities Law, 1968 (the “Securities Law”) and the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 1995. The Fund units will not be sold to investors who are not of the type listed in the first schedule of the Securities Law.