Personalized Medicine: The Future of Healthcare

The Future of Healthcare: Personalized Medicine

by Marc Lichtenfeld, Investment U Senior Analyst
Wednesday, November 9, 2011: Issue #1639

I just got back from my annual physical. Fortunately, everything was fine. But my experience solidified my belief that one of the major healthcare trends that will emerge is the concept of personalized medicine.

I had been going to the same doctor every year since 2003. He’s a good guy and has helped me when I’ve been sick. But when I went for my physical every year, he’d tell me to watch my cholesterol, turn my head and cough, and that was pretty much the end of it.

This year, I changed doctors. The practice I go to takes a more holistic approach. No, they’re not burning incense and the place doesn’t smell like patchouli. They’re still MDs and they actually practice real medicine and science. Perhaps even more so then many other physicians. When they look at your blood work, they really look at your blood work.

They not only told me what my cholesterol level was, they told me my Vitamin B12, Vitamin D, testosterone and many other levels that could suggest there is a problem or might be the key to solving an issue (there weren’t any, thankfully).

The doctor then actually spent time explaining the numbers, discussing preventative care and why certain other tests aren’t necessary.

He made it very clear that I was a patient under his care and we would work together to solve any future problems. I wasn’t simply a name on an electronic record.

Better Health = Better Wealth

Like any other business, customers these days are more demanding. They want better service and a more personalized experience. Many patients are frustrated with the notion that their doctor will listen to them for 10 minutes then write out a prescription and be done (after a 45-minute stay in the waiting room beforehand).

Personalized medicine can deliver that kind of attention that many patients crave.

Not only should it lead to better health, but it can also lead to wealth. The personalized medicine trend is in its infancy and there are quite a few companies and industries poised to benefit.

• Laboratories – Patients aren’t just going in for cholesterol and PSA tests anymore. As I mentioned, I had all kinds of things screened including various nutrients and hormones. Quest Diagnostics (NYSE: DGX) and Laboratory Corp. (NYSE: LH) are the two largest, yet have less than 25-percent market share combined. There’s a lot of room for long-term growth in these two names.

• Natural Foods – Many people are trying to eat healthier in order to prevent disease. Whole Foods’ (Nasdaq: WFMI) fourth-quarter earnings jumped 27 percent and same store sales rose 8.7 percent. Despite a sluggish economy, it appears those with money are serious about trying to eat healthier and better quality foods.

• Along the same lines, United Natural Foods (Nasdaq: UNFI) is expected to grow earnings by 13 percent in 2012 and 14 percent in 2013. If the economy picks up, I suspect those numbers will be conservative.

• Athletic gear – Sporting goods aren’t just for soccer playing teens. Men and women are participating in sports into their eighties. And they have to get their gear and equipment somewhere.

• Lululemon (Nasdaq: LULU) makes expensive clothes for practitioners of yoga. The stock has been ridiculously hot for several years now. But with earnings expected to rise 45 percent in fiscal 2012, there’s no reason why the shares should slow down any time soon. Is it expensive? You bet your bhujangasana it is. But stocks have a way of staying overvalued (or undervalued) much longer than anyone expects they will. As long as Lululemon keeps delivering stellar results, the stock should continue to move higher.

I will be writing a lot more about personalized medicine over the coming months. There are some amazing new technologies that I’m going to be studying and talking to the management teams behind them.

Look for updates in 2012 on some amazing new developments in the world of healthcare. Now, if you’ll excuse me, I have to go take my vitamin D3.

Good investing,

Marc Lichtenfeld

Article by Investment U