3 Stocks to Take Advantage of the Rise in Personalized Medicine

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For centuries, medical advances focused on protecting large populations with one-size-fits-all treatments. But more recently, personalized medicine has become an increasingly important part of healthcare, with new technology helping to pave the way toward healthcare solutions tailor-made for your own particular needs. That has produced some interesting investing opportunities, and to help highlight them, we turned to three of our Motley Fool healthcare contributors to share some companies that have done a great job of tapping into this emerging trend. Take a look at the stocks they've pointed out and see whether they look like good opportunities for your portfolio.

: Among pharmaceutical companies, Roche Holding AG is arguably the leader in personalized medicine right now. Roche committed its resources to making personalized medicine a centerpiece of its development strategy nine years ago, well before the concept gained the popularity that it now enjoys.

Roche enjoys the advantage of having two large business segments that position it well for developing drugs designed to match specific genetic profiles. Its pharmaceuticals segment developed blockbuster drug Herceptin to treat HER2-positive breast cancer and claims two newer products, Perjeta and Kadcyla, targeting the same indication. Roche's diagnostics segment allows the company to develop and market tests to determine which specific genetic biomarkers a patient has -- a key step in understanding which treatments could be most effective.

Within a few years, we should really see how well Roche's investment in personalized medicine is paying off. The company's pipeline is impressive, with a whopping 35 phase 3 clinical trials underway and the same number of mid-stage trials in progress, many of which fit under the personalized medicine umbrella.

Dan Caplinger: One of the biggest advances supporting the rise of personalized medicine is the ability to perform genetic sequencing in a cost-effective manner. Illumina has been a leader in developing equipment to sequence the human genome, and steady advances in the industry have brought the cost of the company's HiSeq and MiSeq systems down far enough to allow genome mapping for around $1,000. In addition to the reduced expense, Illumina's improving techniques have made genetic mapping a lot faster, shortening the time from the several weeks it used to take to just a single day.

Genetic testing can do a lot to help treat patients. By identifying links to high-risk factors for certain health conditions, genome mapping can alert people to potential future medical conditions before they surface, allowing them to take preventive action while there's still time. Furthermore, as a research tool, genome mapping could lead to big breakthroughs in treating and preventing major diseases, with the potential to isolate causes of maladies and look for ways to attack invasive viruses and organisms or repair the damage that they do to the human body. With such a big head-start in the industry, Illumina is likely to be at the forefront of further advances in the industry for years to come, making it an intriguing investment opportunity right now.

: The rise of personalized medicine has lifted many boats, but perhaps none so extraordinarily as . . The 10-year-old molecular diagnostics company -- founded with the colossally noble goal of eradicating colorectal cancer -- has now reached a $2.5 billion market cap.

Investors could well ask exactly how Exact Sciences' revenue of $2 million last year, against a loss of $100 million, actually merits that market cap. But let's look closer, because the company has a huge opportunity in front of it. Moreover, a binary event just around the corner could catalyze another move upward for this stock.

When it comes to cancer, personalized medicine sometimes means using biomarkers to find and identify tumors. That's how it works with Exact Sciences, whose Cologuard system became the first and only FDA-approved DNA screening test for colon cancer last August.

Medicare reimbursement soon followed, a big factor in Cologuard's sales zipping up to $4.3 million last quarter, compared to $1.5 million in sales in the fourth quarter of 2014. All eyes are now on the next possible approval -- Cologuard's guidelines from the U.S. Preventive Services Task Force (USPSTF). The verdict is expected this year, according to the company. Under the Affordable Care Act, if USPSTF issues an A/B rating, all commercial payers must cover Cologuard.

Meanwhile, the company is forging ahead with plans to develop tests for the entire GI tract. A personalized pancreatic cancer test is slated to reach the market as early as 2017, giving it another revenue stream.

The article 3 Stocks to Take Advantage of the Rise in Personalized Medicine originally appeared on Fool.com.

Cheryl Swanson owns shares of Illumina. Dan Caplinger has no position in any stocks mentioned. Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Illumina. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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