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Founder of Ark Invest Cathie Wood has had a long and interesting relationship with gene-editing stocks. With a slew of recent sales in the industry, however, the connection may be souring.
The fund manager has long maintained her profit-making faith in the developing medical industry. However, recently it seems the Ark Innovation (NYSEARCA:ARKK) CEO has had a change of heart. Wood has been selling off her positions in a number of gene-editing stocks, with little stated or apparent precedent.
Between May 23 and June 1, Wood sold off roughly 1.36 million shares of Ionis Pharmaceutical (NASDAQ:IONS), a California-based RNA therapeutics company, from the ARK Genomic Revolution (NYSEARCA:ARKG) fund. Using its current share price, Ark shed roughly $49 million of the gene-editing company, worth about 2.75% of ARKG. This comes in addition to sales of Burning Rock Biotech (NASDAQ:BNR) and Editas Medicine (NASDAQ:EDIT) during the same period.
This isn’t necessarily representative of a wider abandonment of the industry as a whole, as Wood did make subsequent purchases of Ginkgo Bioworks (NYSE:DNA), a Boston-based gene-editing company. However, it’s certainly curious that Wood thought now is a prudent time to reallocate the fund’s holdings, especially given the general lack of news coming from in-flux companies the past few weeks.
Wood Sells Off Gene-Editing Stocks Despite Historically Bullish Stance
Wood has long been, well, long on the gene-editing industry. In 2018, she went all-in on “monogenic stem cell therapy,” claiming it was a $2 trillion opportunity. Wood released an entire video detailing the basis behind her bullish take on the burgeoning industry. Some, however, were confused: the scientific community does not recognize Monogenic stem cell therapy as a proven concept.
Stem cell biologist Derrick Rossi even disputed Wood’s claims. “Her revenue projections are very, very hard to believe, for any type of therapy –like several orders of magnitude hard to believe,” Rossi said.
In an interview with CNBC this past December, Wood made a number of largely unfounded gene-editing claims. She implied a wave of impending cures for “three blood-related diseases” in the gene space. Yet, not a single company has obtained approval for treatments of this nature, and none are expected to in the near future.
Ark Genomic Revolution is down 70% from its February 2021 peak. This is in addition to Wood’s flagship Ark Innovation fund, currently in the red about 50% year-to-date. Whether these latest moves prove the difference-maker in Ark’s performance remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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