Column #139

On April 10, 2018 Salveen Richter, a stock analyst with Goldman Sachs, issued a report titled “The Genome Revolution.” In it he questioned the future prospects of biotech companies that develop “one-shot” cures. The question came about because a biotech company, Gilead Sciences (GILD), developed a very effective Hepatitis C therapy that is more than 90% effective. In 2015, the therapy’s introductory year, sales reached $12.5 billion. Since then they have declined with projected 2018 sales being only $4 billion.

That caused Richter to wonder: “Is curing patients a sustainable business model?”

In a note to clients Richter wrote: “The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies. While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

The summary of Richter’s analysis is: “GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients. In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines. … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

The report suggested three potential solutions for biotech firms.
●    Address diseases with larger markets such as Hemophilia, which is growing at ~6-7% annually.
●    Address disorders with higher incidence rates such as spinal muscular atrophy.
●    Expand the portfolio to the hundreds of inherited retinal diseases.

These potential solutions are genetic rather than infectious. They may be considered chronic, but they’re not actually chronic diseases.

If a stock analyst is concerned about the financial sustainability of a business that develops a cure, long ago hospitals and clinics reached the same conclusion. Every day doctors experience what happens to a patient when they’re cured of an infectious disease or injury. The patient doesn’t come back. To counter that, they try to sell everyone on getting annual checkups. They also treat very old people with end-of-life issues by prescribing drugs, procedures, and operations that they themselves would refuse.

On the other hand, doctors, hospitals, and pharmaceuticals are keenly aware of what happens with chronic diseases. In most cases the patients keep coming back for prescriptions and operations until the day they die which is why they represent 85% of healthcare industry sales! Unlike infectious diseases where the cause can be eliminated, chronic diseases are caused mostly by diet and lifestyle and can’t be “killed off” with drugs. The “cure” requires a change in the diet and one’s lifestyle.

Most medical doctors have witnessed clients who addressed and suppressed their chronic diseases with a better diet. They’re aware of the Hippocrates quote: “Let food be thy medicine and medicine be thy food.” Yet what do they do? Do they push changes in the diet that extend beyond the worthless 50-year-old USDA My Plate suggestions that are common knowledge? No, they push operations and pills.

For years biologists and leading nutritional scientists have shown how a proper diet favorably addresses most chronic diseases. They point out the importance of eating grass-fed and Omega-3 meats, wild-caught seafood, and vegetables, especially the green leafy ones. These low-glycemic foods supply all nutrient needs in perfect balance. For years they’ve pointed out the negatives associated with eating grain, seeds, nuts, grain-fed meats, and even some vegetables. Many of these foods are high glycemic. All of them have nutrient deficiencies and excesses and high ratios of Omega-6 to Omega-3 essential fatty acids.

Unfortunately their messages have few sponsors because there’s absolutely no money in treating people with food. That’s because everyone is already eating food. If millions of people changed from eating grains to grass-fed meats, the agricultural community would produce less grain and more beef. The net long-term result would be that farmers would make the same income and consumers would spend the same amount on food.

The reason it works this way is because farmers own land that can grow many different things. So if they stopped raising grain (all grains are seeds of grass plants) and let cattle graze grass instead, in the end they would make about the same money as before. Therefore in the long-haul nobody makes more money when demand shifts from one food sector to another.

Doctors and hospitals will always strive to be economically viable. Treating people is how they do it. Cures stop revenue. Chronic diseases pay today and forever. The bottom line is that the healthcare industry needs sick people and Wall Street, the provider of Big Money, agrees.

To your health.

Ted Slanker

Ted Slanker has been reporting on the fundamentals of nutritional research in publications, television and radio appearances, and at conferences since 1999. He condenses complex studies into the basics required for health and well-being. His eBook, The Real Diet of Man, is available online.

Don’t miss these links for additional reading:

The Importance of the Ratio of Omega 6 Omega 3 Essential Fatty Acids by Dr. Artemis Simopoulos

Gilead Sciences from Wikipedia

Goldman Sachs asks in biotech research report: ‘Is curing patients a sustainable business model?’ by CNBC

Study: Doctors would choose less aggressive end-of-life care for themselves from Stanford University

No Money In It by Ted Slanker

No Money Behind Nutritional Science by Ted Slanker

USDA My Plate