Genetic Engineering: A Budding Bull Market

Written By Jason Stutman

Posted June 25, 2015

When I was a kid, my all-time favorite movie was Jurassic Park.

I watched the movie countless times on VHS and even had all the coolest toys: a miniature 1993 Jeep Wrangler equipped with a functional harpoon gun, a water-spitting Dilophosaurus, and, of course, an electronic Tyrannosaurus Rex that roared and stomped on my command.

For a long time, I idolized the fictional Dr. Alan Grant as my hero and became obsessed with both archeology and genetics. Could we really bring back the dinosaurs by extracting DNA from mosquitoes? I had to know everything.

Over the course of two decades, though, my enthusiasm for dinosaurs gradually faded. I eventually came to realize locating dino DNA wasn’t much more than a pipe dream… and that no sequel would ever actually rival the original film.

When I first heard Jurassic World was coming to theaters, I was skeptical, the say the least. After all, the plot surrounds a genetically enhanced dinosaur hybrid, which sounds almost as outlandish as the idea of transforming robots from outer space.

As it turns out, though, Jurassic World really isn’t that bad of a film, and, believe it or not, the idea of genetic hybrids isn’t far-fetched at all. In fact, you might be surprised to find out these things exist already…

A Spider What?

Whenever I tell anyone about the existence of the spider-goat, people usually look at me like I have two heads, but I assure you this thing is real.

Strong, flexible spider silk is among the most valuable materials in nature. It’s useful in a wide range of products including artificial ligaments, bulletproof clothing, and even sutures for nerve surgery.spider goats

Of course, harvesting silk from spiders is no easy task, which is why Nexia Biotechnologies began splicing spider DNA with goats back in 1993. The company was a bit ahead of its time and went bankrupt in 2009, but 30 of these spider-goat hybrids still live on at Utah State University today.

As far out as that might sound, it’s true. Right around the time Jurassic Park first came to theaters talking about splicing frog DNA into dinosaur DNA, real scientists were making goats that were part spider.

Despite what you might expect, these spider-goats don’t have eight legs or twelve eyes, though. In fact, they look the same as any other goat — the only notable difference is that their milk contains elements of golden orb spider silk.

But spider-goats aren’t the only gene-altered animals out there. For instance:

  • In 2007, South Korean scientists altered cat DNA to make them glow in the dark.
  • That same year, British scientists genetically modified hens to produce cancer-fighting eggs.
  • In 2010, the Canadian government funded the genetic manipulation of pigs to make their urine and feces contain up to 65% less phosphorous.
  • Harvard geneticists announced last month that they have spliced mammoth DNA into an Asian elephant genome, bringing us one step closer to real-life “de-extinction.”

Now, I bring all this up not because there are any investment opportunities in spider-goats, fluorescent felines, or dinosaur de-extinction parks, but simply to point out a scientific reality: Genetic manipulation is incredibly advanced today, and the potential applications should not be overlooked by investors.

The most obvious example of how profitable genetic engineering technology can be is Monsanto Co. (NYSE: MON). Sure, it may be one of the most hated companies in the world, but regardless of anyone’s opinion, there’s no denying the fact Monsanto has offered enormous returns over the last 15 years.

Monsanto Full Data

There are plenty of lesser-known companies worth keeping an eye on, too, one of which is Charles River Laboratories International, Inc. (NYSE: CRL).

Charles River provides the medical research community with genetically engineered rodents for drug-development purposes. It has over 30 different mouse and rat models for specific research applications, including cardiovascular, oncology, diabetes, fertility, and the central nervous system, just to name a few.

As is the case with Monsanto, there are obvious grounds for social opposition to Charles River, but as the former has shown, public opinion has minimal bearing on company performance.

As for smaller players, I was recently turned onto a small microcap biotechnology company focused on the genetic modification of tobacco by my good friend and colleague, Alex Koyfman. Apparently, this firm can modify nicotine content (up to a 97% reduction) and lower the harm caused by smoking.

In other words, this company is developing what could potentially be considered safe cigarettes — well, safer than usual, at least. Considering the emerging trend of safe-smoking devices such as e-cigarettes, this microcap is intriguing, to say the least.

We’re putting together a full presentation on the company at this very moment, so keep an eye out as we gather the details over the next several weeks.

Until next time,

  JS Sig

Jason Stutman

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