Dive Into Disruptive Investing: 2 Cathie Wood Biotech Picks for the Bold Investor

Are you ready to embrace risk for a chance at high rewards? If so, Cathie Wood's latest biotech picks might just be for you. Wood, known for her bold investment strategies, has added Intellia Therapeutics and Recursion Pharmaceuticals to her Ark Innovation ETF. Here's why you should consider joining her on this thrilling ride.

Intellia Therapeutics (NASDAQ: NTLA)

The Potential

Intellia Therapeutics is a gene-editing company with a mission to treat or cure inherited diseases at their genetic roots. This company aligns perfectly with Cathie Wood's focus on disruptive innovation. Intellia's standout feature is its cutting-edge gene-editing technology, which, if successful, could revolutionize the medical field by eliminating the need for traditional treatments that merely manage symptoms.

The Pipeline

While much of Intellia's work is in the early stages, it has a noteworthy late-stage program targeting transthyretin (ATTR) amyloidosis, set to enter phase 3 clinical trials soon. Additionally, it has a mid-stage program for hereditary angioedema (HAE) that could yield exciting data by year-end. These potential breakthroughs aim at providing one-time treatments that offer long-term relief, a game-changer in the healthcare sector.

The Financials

Financial health is crucial, and Intellia is in a solid position with roughly $940 million in liquidity as of Q2, covering its R&D expenses of $449 million for the trailing-12-month period. This gives the company a runway through late 2026.

The Risks

Investing in Intellia isn't without risks. The ambitious gene-editing projects could hit scientific or regulatory roadblocks, causing the stock to plummet. The company's treatments are also unproven in real-world settings, adding to the uncertainty.

However, for investors with a high-risk tolerance, Intellia offers a promising opportunity for significant returns if their innovative therapies succeed.

Recursion Pharmaceuticals (NASDAQ: RXRX)

The Potential

Recursion Pharmaceuticals stands out by leveraging artificial intelligence (AI) to revolutionize drug discovery. With five mid-stage clinical trials focusing on rare diseases like cerebral cavernous malformations (CCMs), the company integrates AI to streamline and enhance drug development, a move that has captured Cathie Wood's interest.

The Pipeline and Merger

Recursion is on the brink of expanding its influence through a merger with Exscientia, another AI-driven biotech. Expected to close by early 2025, this merger will significantly bolster Recursion's cash reserves, clinical pipeline, and collaborative opportunities with big pharma players like Merck, Roche, and Nvidia.

The Financials

Post-merger, Recursion will boast a combined cash runway through 2026. Additionally, it could secure up to $200 million in collaboration milestone payments in the next two years. The merger is also anticipated to yield $100 million in efficiencies, further strengthening its financial position.

The Risks

Despite its potential, AI-driven drug development is still a nascent field with uncertain outcomes. The merger introduces integration risks, and the anticipated efficiencies are not guaranteed. Recursion's stock could be volatile as it navigates these challenges.

But for those who believe in the transformative power of AI in healthcare, Recursion Pharmaceuticals represents an exciting investment opportunity.

Should You Invest?

Before diving in, it's essential to weigh these stocks against your risk tolerance and investment goals. Intellia Therapeutics and Recursion Pharmaceuticals offer exposure to cutting-edge innovations with the potential for substantial rewards, but they also come with significant risks.

For investors willing to stomach the volatility, these Cathie Wood picks might just be the disruptive winners of tomorrow's biotech landscape.