Doc's note: We're in a platinum age of healthcare. Medical advances are happening at a quicker pace than we've ever seen, and they are saving lives.
Joe Austin, from our corporate affiliate Chaikin Analytics, explains how AI is making the medications doctors prescribe to patients less of a guessing game and more of a precision science...
Sometimes, modern medicine is just a bet...
You can lose everything if the gamble doesn't pay off. And even if you win, your doctor might not know why.
And worse, far too often, doctors don't know what will happen until they start treatment.
The most expensive drugs can work miracles with one patient... and do nothing for another.
So as a patient, you're paying a hefty bill for something that might not even work.
Take the case of Deen Allen, for example...
Allen is a 59-year-old research chemist from New Jersey. He helps develop antibacterial hand soaps. And he enjoys helping middle-school students learn about math and science.
For months, starting in 2011, Allen suffered from severe stomach cramps and diarrhea. He also experienced pain in his joints – especially his fingers.
Doctors initially diagnosed Allen with an inflammatory bowel disease ("IBD").
An IBD is a condition where the immune system attacks the digestive tract. The most common types of IBDs are Crohn's disease and ulcerative colitis.
At first, the doctors' treatment worked. Allen's symptoms went away. For about two years, he didn't have any issues. So they said he was in remission.
But soon after stopping the medication, Allen's problems returned – and got worse...
He would often be writhing in pain on the floor. And after dealing with these issues for a couple more years, he lost roughly 80 pounds.
Doctors only figured out the real problem after Allen underwent a colonoscopy. Allen's original diagnosis was wrong. Instead, doctors discovered that he had rheumatoid arthritis.
That still didn't stop the pain – or the medical bills...
Even after Allen got the right diagnosis, he still faced years of trial and error with biologics. This class of drugs suppresses the immune system to reduce inflammation.
Doctors put Allen on Humira. But after about a year, it no longer worked for him. Then, he tried Enbrel – which also eventually stopped working.
These drugs can each cost at least $9,000 per month. That's more than $100,000 per year.
Allen finally found relief with another drug, Remicade. This biologic costs anywhere from $50,000 to $150,000 per year.
These drugs aren't magic elixirs. Research shows that 30% to 40% of patients quit drugs like Humira, Enbrel, and Remicade because they don't work or patients can't handle the side effects.
Allen's story is about years of doctors guessing wrong – and still needing to gamble more with his treatment.
On the flip side, Sandy Doria's story is about a guess that paid off...
This 'Last Ditch Effort' Drug Saved a Woman's Life
The skincare specialist from California got married in July 2011. Just four months later, Doria learned that she had an aggressive form of breast cancer.
Doctors removed the tumor. And for a while, they thought all was well.
But six months later, the cancer came back. This time, it was in Doria's breast and left lung. Her cancer was triple-negative – a type that mutates and becomes especially hard to treat.
Doria tried multiple treatments. Nothing worked. Eventually, tumors covered her chest. And the pain became so bad that she relied on morphine just to get through the day.
Doria's doctors offered one last option. She could join a clinical trial for an experimental drug known at the time only by its lab code – MPDL-3280A.
It was a long shot. But Doria was running out of time. So she had to take the gamble.
Within months, Doria's tumors were gone.
Unfortunately, she started suffering debilitating side effects – including a severe case of colitis. So doctors had to stop her treatment.
But Doria's cancer never came back. Her doctor believes the MPDL-3280A – which became the FDA-approved Tecentriq – retrained her immune system to keep hunting cancer cells long after the drug left her body.
Years later, Doria remained in full remission. And her doctor still couldn't fully explain why.
Tecentriq costs more than $100,000 per year. And at the time of Doria's treatment, research showed that only around 13% of patients saw any benefit.
Fortunately, this gamble paid off as Doria was part of that 13%.
Biologics are some of the most expensive drugs in medicine. They make up nearly 40% of U.S. drug spending. And yet, they represent only about 2% of all prescriptions filled.
That brings us to my point...
AI Is Turbocharging the Healthcare Sector
These drugs all work. They just don't work for everyone. And unfortunately, right now, doctors can't reliably know who it works for before patients shell out all that money.
This isn't a drug problem. It's a data problem.
The key to success is matching the right drug to the right patient. For now, it's still trial and error.
But there's a "fix"...
The fix is understanding how a patient's cells respond to a drug before prescribing it. And for the first time, we have the tools to do that for every patient – not just a lucky few.
It's a process known as "precision medicine." And there are healthcare companies using AI to refine this process.
AI-related drug discovery needs biological data to train on. But not just any data. It needs cell-level data at a massive scale – with location information intact.
Companies are building the "measurement layer" that will make medicine's next big leap possible...
Without it, AI models are just guessing. But with it, they can start to predict which patients will respond to a treatment before anyone sets foot in a clinic.
Folks, there are a lot of worries about how AI will disrupt our daily lives...
But it can also refine older, more expensive processes to open new chapters of discovery.
And healthcare is only one of the many industries jumping on board.
We recently discussed the healthcare sector's quiet growth in our Chaikin PowerFeed...
However, many of these innovative drug companies can be tracked through the State Street SPDR S&P Biotech Fund (XBI).
Today, XBI gets a "bullish" rating from the Power Gauge. Year to date, the fund has grown a solid 30%. And with roughly 100 "neutral" and "bullish" stocks in the fund, there are many places to consider putting money to work.
So keep watching this industry as AI continues to change the way we approach medicine.
Good investing,
Joe Austin
Editor's note: Beginning tomorrow, most people will be rudely awakened by which AI stocks still have real, true potential to rise 100% or more...
And which are secretly "trash" who've been flying high on momentum and are due to crash imminently. Especially the recent IPOs.
If you're worried about what AI stocks could do to your portfolio, click here.
