Sunday, January 7, 2024

Valuation of Genomics Investments: White Paper on Agile Due Diligence

Header: For JP Morgan, a new White Paper: Agile Diligence in Genomics

Update May 20, 2024

Business Week's cover features the financial implosion at 23andMe.  This white paper helps us understand the wild swings in genomic valuations which can change wildly despite little variance in the business's fundamentals or growth rate.   Biotech stocks are also volatile, but usually in response to concrete risky events like clinical study failures.  23andMe trades at 50 cents, down 97% from $16 in 2021 during the Covid valuation bubble.


This new white paper provides a comprehensive overview of the principles and special considerations essential for due diligence in genomics investments. We address the unique dynamics of the genomics market, highlighting both the potential and volatility of investments in this sector. 

The paper delves into ten specific features of genomics due diligence, such as lab test pricing rules, Medicare valuation for algorithms and AI, and special policies unique to genomics. The white paper also explores clinical development challenges, including dealing with retrospective data and overfitting, and offers insights into defining clinical utility and understanding payer perspectives. Additionally, we discuss the implications for investors stemming from regional lab trends and the local scaling-up and -down of investment capital in the genomic testing.

White paper in the cloud HERE.