CHAPTER 12

PRECISION, NANO, AND REGENERATIVE MEDICINE: SCIENCE FICTION MEETS REALITY

Data, predictive analytics, crazy fast supercomputers, and our understanding of the human genome have turned health sciences and drug discovery upside down. Traditional pharmaceutical companies are partnering with Silicon Valley stalwarts. Tech entrepreneurs are starting medical foundations. In May 2014, Samsung announced it wanted to start a drug business. Lines are being blurred. Medicine now looks more like computer science. That is a very good thing.

In this chapter I will show how this convergence is leading to real breakthroughs. I will drive into some of the wild projects—electric, and really small—that are in the pipeline. I will show how your smartphone may play a bigger role in future healthcare. I will also examine how a simple device might relieve the opioid crisis that is ravaging the country. And I will end with an unconventional stock pick, a consulting company working to fund many next-generation delivery strategies.

Personalized Medicine

One size shouldn’t fit all.

Precision medicine promises to change health sciences by using data analytics and what we know about ourselves to tailor personal therapies and treatments.

Doctors should be able to use technology to deliver the right treatment to the right person at the right time. It all seems straightforward enough; getting to that point is more complex.

It started with the sequencing of the human genome. That project provided the road map to allow scientists to learn about illness at the cellular level, determine what precisely went wrong, and—at least in theory—determine a treatment for the mutation.

For example, most patients currently diagnosed with cancer undergo a battery of oncology tests and usually end up with surgery and chemotherapy. That one-size-fits-all treatment carpet bombs everything, killing good and bad cells indiscriminately.

Precision medicine is more of a smart bomb. Doctors locate the mutation at the cellular level, find the specific drug treatment to correct the abnormality, and calibrate the dosage based on personal metrics.

The theory is great. The only drawback is cost.

Technology is helping. Today, powerful cloud-based computers, using advanced algorithms, can sequence the human genome in less than a week for as little as a few thousand dollars. Soon it will be within the realm of possibility to screen every patient.

And it won’t end with genes. Scientists are analyzing the microbes on our skin and in our gut. They are looking at environmental factors and even our diets to tailor treatments for illness that meet our individual needs. Sensor data from wearables like FitBit, smart watches, and smartphones will help, too.

True personalized medicine is coming.

In January 2015, President Obama announced that the administration would add $215 million to the annual budget for a comprehensive precision medicine plan. With bipartisan support—a rarity in the current political environment—the plan enlisted most of the leading medical facilitators.

The National Institutes of Health is helping to build a sample group of one million volunteers to draw more data. The National Cancer Institute will research the genomic drivers of cancer. The Food and Drug Administration will develop new testing techniques to expedite the drug approval process. And a consortium of privacy groups is being consulted to maintain strict privacy standards.

Pharmaceutical companies are gearing up. In 2015, Roche promised as much as $1 billion to Blueprint Medicines (BPMC) for five small molecule projects in development. Then, in January 2016, Roche announced it would spend another $1 billion for a 56 percent stake in Foundation Medicine, a molecular and genomic diagnostic company. Illumina (ILMN), another diagnostic service provider, has formed similar alliances with Germany’s Merck KGaA, AstraZeneca, and Sanofi.

Each of us is unique, a product of our own chemistry and environmental factors. It makes sense to build healthcare treatments tailored to that uniqueness. Ultimately it will be less costly and more effective. The evidence is piling up.

The key is getting more evidence. Precision medicine has the potential to create exciting new therapies and change the course of patient treatment. One of those personalized treatments, T-cell therapy, changed the life of a young leukemia patient named Emily. There will be many more success stories like her.

Patient Zero: Emily Whitehead

With a thick mop of wavy brown hair and a big toothy smile, Emily Whitehead looked like an average twelve-year-old.

Looks can be deceiving. She was the first child to receive CAR-T therapy, an innovative treatment that reengineers a patient’s T-cells to fight aggressive cancers.

As a five-year-old, her parents, Tom and Kari, noticed she had become lethargic. Later, she began to develop bruises. Her gums would often bleed. After complaining of excruciating pain in her legs one evening, she was rushed to a hospital emergency room.

After several weeks of testing, her doctors concluded she was suffering from acute lymphoblastic leukemia, a treatable cancer with an 85 percent survival rate. However, Emily was an exception. After two intensive rounds of chemotherapy, the cancer continued to progress. Worse, she was not a suitable candidate for a bone marrow transplant.

As her condition worsened, Emily’s parents reached out to the Children’s Hospital of Philadelphia. Dr. Carl June, of the University of Pennsylvania, had been making exciting progress with mice and early stage human trials using an experimental treatment called CAR-T.

On April 17, 2012, Emily became his first pediatric patient.

First, doctors removed T-cells, often called the fighters of the immune system, from a blood sample. In the lab, these cells were multiplied and methodically reprogrammed to target and fight cancer. The fighter cells were then put back into Emily’s body to target and kill cancer cells.

Side effects are normal. The purpose of the immune system is to fight outside infections. After Emily’s third infusion, her temperature soared to 105 degrees. She had swelling in her extremities. Her blood pressure plummeted. She had trouble breathing as her lungs filled with fluid.

Her immune system had kicked into overdrive to reject the reengineered T-cells. Dr. June saw no recourse but to induce a medical coma, and cautioned Tom and Kari to expect the worse.

As a last-ditch effort, Dr. June prescribed a rheumatoid arthritis drug to relieve the inflammation. Although the treatment had never been used in that capacity, he hoped it might also suppress the immune response that put Emily in peril.

Fourteen days later, on her birthday, May 2, she woke up. Two weeks later, she was completely cancer free.

Today, she is a healthy girl. She likes Taylor Swift and sleepovers with her BFFs. She even got to meet her personal favorite, Lady Gaga. Emily and her family were special guests at the August 2017 launch of the Parker Institute for Cancer Immunotherapy in San Francisco.

She still goes to the hospital twice a month for B-cell replacement. Those cells were casualties of the CAR-T therapy. And she does suffer from Crohn’s Disease. Otherwise, she is an average kid.

Former Napster Turns Immunotherapy Philanthropist

In April 2016, Sean Parker made headlines by donating $250 million to immune therapy cancer research.

Say and think what you will about the Silicon Valley billionaire, but Parker has shown an impeccable talent for attaching himself to winning ideas at just the right time.

In the summer of 1994, at age 15, Parker was into theoretical physics and hacking. Three years later, he and Shawn Fanning introduced peer-to-peer file sharing to the world with the music site Napster. A year later, that business had tens of millions of users.

In hacking circles, he was the closest thing to a rock star. That status helped him become the first president of Facebook in 2004.

Immunotherapy is where the Internet was in the early 2000s. It is certainly not new. For decades researchers, many of them Nobel Prize winning, have sought a way to harness the inherent prowess of the human immune system.

The concept is simple: The immune system has powerful agents called T-cells that seek out and destroy harmful invading viruses and infection, so why not use these same weapons to fight cancer? It makes perfect sense except it was quickly discovered that cancer and other maladies like human immunodeficiency virus (HIV) are often able to hide from T-cells.

In 1992, Japanese scientists determined the reason for this evasion was a special molecule on T-cells, which they labeled “program death 1” (PD1). Disrupting PD1 has met with varying degrees of success. In some cases, new drugs were temporarily effective. In other cases, the results were catastrophic, with T-cells destroying cells indiscriminately and causing patient death.

Enter gene editing and big data. By snipping and fixing DNA, researchers have been able to modify T-cells to make them more effective cancer warriors.

The biotechnology firm Cellectis used the TALENs gene-editing process to construct T-cells that specifically found and destroyed blood cell abnormalities common to leukemia. In the first celebrated case, this procedure led to the complete cure of a British toddler. Since then 300 additional patients have enjoyed mostly spectacular results.

In 2015, Alphabet—the parent of Google—held a conference with leading oncologists and biologists at Massachusetts Institute of Technology expressly to determine what parts of the process could benefit from its expertise in machine learning and compute power.

Its biotechnology subsidiary, Verily, is now believed to be working on therapies that evolve from better understanding of how T-cells attack cancer within the tumor.

Jeffrey Hammerbacker, the former Facebook big data guru, is now at Mount Sinai Hospital in New York. There, he and 12 programmers are developing software that determines how a person’s DNA can be optimized to build better cancer-fighting T-cells. By most accounts, the science is still about two years away from legitimate curative medicines. However, the discovery process is accelerating as information technology progresses.

And this would be an extraordinary discovery.

Two of the leading immunotherapy enterprises, Kite Pharmaceuticals and Juno Therapeutics, were swallowed by Gilead Sciences in August 2017, and Celgene Corp. in January 2018, respectively.

Big pharma is circling. Good things are near.

Sean Parker put himself in the middle of genetically modified immune cell therapies. In 2016, the Parker Institute for Cancer Immunotherapy launched with 40 laboratories, 300 researchers, and six of the leading cancer centers in the United States.

New York’s Memorial Sloan Kettering; Stanford Medicine; the University of California, Los Angeles; the University of California, San Francisco; Houston’s University of Texas MD Anderson; and the University of Pennsylvania in Philadelphia were founding partners.

By March 2018, the ranks of leading cancer centers had swollen to ten. Boston’s Dana-Farber Cancer Institute, Fred Hutchinson Cancer Research Center in Seattle, Icahn School of Medicine at Mount Sinai of New York, and the Washington School of Medicine in St. Louis are all exchanging data.

Parker told Axios in March 2018 that the number of affiliated labs now exceeds 60. The number of industry and nonprofit partners has grown to 40.

And best of all, the labs, researchers, and cancer centers will share data. It is a throwback to his Napster days. The institute is a peer-to-peer network. By exchanging data quickly and transparently, everyone on the network gets the most complete version of the truth.

The idea is to disrupt the conventional discovery process.

Initially, researchers will focus on modifying personal T-cells, boosting patient responses to immunotherapy drugs, and developing innovative ways to attack cancer tumors.

These therapies hold potential cures for autoimmune disorders including multiple sclerosis, lupus, HIV, arthritis, diabetes, and the big one, cancer. That’s not bad for a guy who started out building software to help teens steal music online.

Google Electrifies Medical Research

In August 2016, GlaxoSmithKline and Verily Life Sciences made a startling announcement. Together, they believe they can bring tiny implantable robots to medicine.

The pharmaceutical industry has made tremendous gains in medicine. Until now, all have been achieved through better chemistry. It is the basis of modern medicine. Glaxo and Verily believe there is another way. Clinicians have made significant medical progress by regulating, and in some cases changing, electrical impulses to the nervous system.

The goal is to take that research to the next level with implanted machines no bigger than a grain of rice. They’ll attach themselves to tissue in our lungs, gut, and other regions. They will zap nerves and hopefully change the way our bodies deal with chronic illnesses like asthma, Crohn’s Disease, diabetes, and even arthritis.

If all of this sounds a lot like the plot of 1966 film Fantastic Voyage, that’s because it is—minus the cheesy special effects and Raquel Welch in a jumpsuit. But the science is strong.

In October 2015, the research division at the Pentagon announced a project based on similar science.

The Defense Advanced Research Projects Agency selected seven leading research facilities. The goal of the $80 million project, called ElectRx, was to map the neural circuitry of the human body and determine how sensors and motor signals affect changes in the human brain and organs.

In the DARPA announcement press release, Doug Weber, the project manager, said ElectRx supposes there is a system of protocols that moderates functions in the brain, spinal cord, and internal organs to maintain health. Finding and learning how to stimulate those protocols should be the key to health.

It is a simple theory with plenty of basis in data. The most direct evidence is the modern pacemaker. A simple electronic device uses pulses of regulated electricity to stimulate and force the heart to beat at a healthy rate.

ElectRx is a pacemaker for the peripheral nervous system, Weber explains.

Initially, DARPA has been focused on inflammatory diseases like rheumatoid arthritis and chronic pain. There is a simple reason. Researchers believe post-traumatic stress disorder, a disease rampant among returning soldiers, is the product of excess levels of biomolecules in the body.

In theory, finding a way to regulate those levels would be a minimally invasive way to bring comfort to many thousands of veterans.

Through mid-2018, the project involves seven development teams with a robust software and medical device pedigree. Researchers at Circuit Therapeutics of Menlo Park, New York’s Columbia University, the Florey Institute of Neuroscience in Australia, John’s Hopkins University in Baltimore, MIT in Cambridge, Purdue University in Indiana, and the University of Texas in Dallas will divvy up $80 million in funding.

The GSK/Verily partnership is even bigger.

The companies invested a total of $715 million in August 2016 in a brand new bioelectronics business they call Galvani Bioelectronics. The new unit set up research facilities near its parents’ digs north of London, and in San Francisco. There, the teams totaling 30 scientists and clinicians pool existing intellectual property and have begun the process of studying and building tiny battery powered devices.

GSK and Verily bring very different skill sets to the new 55/45 joint venture. The British pharmaceutical giant adds its long history of biology, drug development, and delivery. Verily brings its expertise in software architecture, data analytics, electrical engineering, and miniaturization.

The new company takes its name from Luigi Galvani, the Italian researcher who is considered the father of neuroscience. He gained fame by animating severed frog legs with a type of static electricity in 1780.

While that might seem like a strange way to spend time in the eighteenth century, keep in mind doctors continue to use the precepts of that seminal work today with pacemakers. Galvani Bioelectronics plans to follow that lead too, only with substantially smaller gear.

This has been a focus of GSK for some time. Since 2012 it’s been pouring money into the nascent field with zeal. Moncef Slaoui, the chairman of its global vaccines unit, explained: “This agreement with Verily to establish Galvani Bioelectronics signals a crucial step forward in GSK’s bioelectronics journey, bringing together health and tech to realize a shared vision of miniaturized, precision electrical therapies. Together, we can rapidly accelerate the pace of progress in this exciting field, to develop innovative medicines that truly speak the electrical language of the body.”

It’s hard to imagine that technology has reached the point where scientists are serious about tiny implanted robots capable of fighting chronic illness. Yet, some of the brightest minds in pharmaceutical research and data science believe it is both possible and transformational.

Galvani Bioelectronics is not yet a public company, and Verily represents a tiny part of Alphabet.

We Need to Think Even Smaller

You know who saw all of this coming long ago? Ray Kurzweil.

In January 2016, standing before a conference audience in Vancouver, he told attendees that in 25 years, computers would be one billion times more powerful per dollar and 100,000 times smaller.

He was speaking of a field called nanotechnology. It takes its name from nanometer, a measurement. One nanometer is 1/1,000,000,000th of a meter, or 1/100th the width of a human hair.

We are not talking about implantable computers the size of a grain of rice. Kurzweil is predicting that computers will be the size of blood cells. Imagine what would be possible.

Before you dismiss all of this as quackery, you should know previous Kurzweil predictions have been uncanny. In his 1990 book, The Age of Intelligent Machines, he predicted the Internet would become the defining consumer technology of our generation.

Considering CompuServe and Prodigy together accounted for little more than one million users at the time, it seemed like crazy talk.

And then there were his predictions about the rise of mobile phones, fax machines, and even the fall of the Soviet Union. In later books he said we should expect supercomputers in the cloud and wireless, wearable computing devices. At the time, all of these ideas seemed outside the realm of possibility.

Yet today, powerful cloud-computing networks power our cities, communications, and the smartphones we cannot seem to live without. The latest Apple Watch can independently monitor the wearer’s heart rate and blood oxygen level.

And Kurzweil, by all accounts, is a genius. He is a very successful inventor. By rethinking the way light is sent, collected, and delivered by sensors, he created the first CCD flatbed scanner. It is a technology we now take for granted in modern home printers. He invented the first print-to-speech reading machine for the blind. He invented the modern synthesizer.

Those Kurzweil keyboards you see at concerts and music videos—that’s him.

In 1999, he received the National Medal of Technology and Innovation. In 2002 he was inducted into the National Inventors Hall of Fame. Inc. magazine called him “Edison’s rightful heir.” He has been a professor at MIT. And since 2012, he’s been the head engineer at Google.

When computers are so small they can be easily delivered into the blood stream, he says, humans will cure most diseases. They will diagnose illnesses and dispatch tiny computers with the appropriate drug treatments.

Kurzweil predicts most of this will occur in the 2030s. In the interim, researchers are working with the tools they have to deliver targeted drug treatments or blast away cancer cells.

Most of the excitement has centered on nanoparticles.

The first FDA-approved nanoparticle treatment occurred in 1995 when Doxil was approved. The treatment was used for adult cancers such as ovarian, multiple myeloma, and Karposi sarcoma, a rare form of cancer associated with HIV/AIDS.

The attraction of nanoparticles is drug treatment delivery. Because the particles can be engineered, they can get to places traditional treatments cannot. Very often, they are designed to bind to cancer cells and deliver the drug treatment to a specific location. This is very different than most treatments that impact general locations.

Researchers at Durham University in the United Kingdom, and Rice University in the United States, are making real progress.

In September 2016, the research teams jointly published a paper in Nature, the respected science journal. The researchers have been able to build tiny molecular machines governed by light that are capable of killing cancer cells.

It’s the beginning of noninvasive surgery. And it’s going to be a huge investment opportunity.

Scientists have been trying to mobilize molecular structures for a long time. They strung together molecules in the shape of cars and submarines. The goal was to develop nanomachines capable of creating enough momentum to push through the natural currents in the human body, and eventually penetrate cells.

James Tour, professor of Chemistry, Computer Science, Material Science, and Nanotechnology at Rice, believes there has been a breakthrough.

His team increased the effectiveness of the nanomachines by including addends. These additional molecules have specific functions, like recognizing and attaching to targeted cells. For example, peptide addends are used to recognize human prostate cancer cells. The nanomachine moves through the body, looking for those cells. When they are located, the machines attach to the cancer cells.

They are dormant until they are activated by ultraviolet light. Then the powerful rotors begin spinning.

Tour and the team at Durham have been able to build molecular machines that spin at a rate of two to three million revolutions per second. That’s fast enough to burrow through cell walls.

In animal tests, the machines have been able to annihilate cancers and other tumors in seconds.

They are powerful, tiny, and utilitarian. Tour says around 50,000 nanomachines can fit across the diameter of a human hair. And in the near future he expects they will be able to carry pharmaceuticals. They will seek the targeted cancer cells, burrow holes, and then place the necessary drug treatment.

There is another key component. According to reporting from The Telegraph, the machines are completely harmless until they are activated by ultraviolet light. This means they are perfect for treatment of breast tumors, skin melanomas, and cancers that are especially resistant to chemotherapy.

“It’s going to be a whole new way to treat patients,” Tour said in a YouTube video promoting the research.

In September 2017, researchers at Caltech built nanoscale DNA robots capable of picking up other DNA material. While these are not the miniature computers promised by Kurzweil, they are tiny mechanical structures.

In February 2018, teams of scientists from Arizona State University and the National Center for Nanoscience and Technology of the Chinese Academy of Sciences published new findings in Nature. They have had success stopping and, in some cases, killing cancer tumors by injecting mice and pigs with nanobots constructed from sheets of DNA.

Measuring 60–90 nanometers, these sheets of DNA are folded like origami. The outside of the structure consists of a protein that is present in the lining of blood vessels associated with tumors. The inside carries a package of thrombin molecules, an agent that causes blood to clot.

When the nanorobot reaches its target, molecules called aptamers force the folds open, releasing the blood clotting thrombin. The nanorobot effectively starves the tumor of the oxygen it needs to grow by choking off the blood supply. It is a simple, effective strategy borrowed from angiogenesis inhibitors, a category of cancer-fighting treatments that kill by strangulation.

What makes origami nanorobots different is the precision. Their molecular composition naturally draws them to the tumor. And because the molecules can be engineered, the bots are very maneuverable.

The other attraction is biology. DNA nanorobots are less likely to be rejected easily by the immune system.

It is still early, and these are really big ideas. But they are out there, and increasing computer power and better information technology makes discovery more likely.

In the interim, life sciences companies are picking the low-hanging fruit. They are repacking the technology we already have to cut costs and save lives.

Patients, Your Smartphone Will See You Now

Providing healthcare is a giant pain. Escalating costs and an aging population are causing a political divide. They are also pushing government budgets to the breaking point.

Two start-ups have a fix. Doctor on Demand and Healthy.io want to use software and the smartphones most of us can’t live without to slash costs and revolutionize healthcare.

As the name suggests, Doctor on Demand focuses on scheduling. The software facilitates video consultations using a smartphone. After the session, the doctor can order tests or even write prescriptions.

Think of it as face time, but with your doctor.

For Hill Ferguson, chief executive of the San Francisco start-up, the big benefit is empowerment. The patient gets to decide when the consultation happens and even where the lab work is completed. That is a big improvement over being “told where to go by your provider,” says Ferguson.

Healthy.io is pushing the smartphone angle even further. It wants to turn the device into a piece of medical equipment. The process starts with a physical test kit sent by mail. Users provide a urine sample on a card, scan the results with their smartphone camera, and send that data to the doctor. The analysis happens immediately.

Cutting out the laboratory opens up more efficient opportunities for early detection. In the long run, these factors slash the cost of providing care.

According to reports from the Centers for Medicare and Medicaid Services, the United States spent $3.2 trillion on healthcare in 2015, or $9,990 per person. And the national health expenditure grew 5.8 percent in 2015, representing 17.8 percent of the gross domestic product.

This means the United States spends more for healthcare than any other country. While it makes sense—rich countries spend more on services, it is not clear that the United States is deriving appropriate value.

Many studies show that America does not receive superior outcomes despite high expenditures. In fact, health outcomes continually fall below the United Kingdom, another rich country, despite spending roughly three times more per capita.

Technology companies hope software can change that. In April 2017, Verily, the Alphabet subsidiary, announced a 10,000-person, four-year study in conjunction with Stanford and Duke universities.

Each subject will wear a custom wrist sensor capable of continuously collecting heart data. Additionally, every year, they will undergo detailed medical tests, offering blood, sweat, urine, and even tears. The goal is to digitalize everything and then use powerful machine-learning software to learn more about general health and preventative measures to reduce costs.

The past two decades have seen a software revolution spawned by digitalization. Software changed the way we consume media and buy products and services. Decidedly, analog experiences were transformed into bits of data that could be manipulated and optimized with software. The result was plummeting costs.

New Device Eases Agony of Kicking Opioids

The opioid epidemic ravages small and large towns across America.

And it has largely been intractable both to law enforcement and to the medical community. Until now.

In November 2017, the Food and Drug Administration approved the first electronic device for the treatment of opioid withdrawal. For the government, it is an all-hands-on-deck moment.

The device, Neuro-Stim System-2 Bridge, looks like a large hearing aid with four wires. Doctors can affix the device behind a patient’s ear. Then they attach its stimulation electrodes to nerve centers near and in the ear.

When the patient feels pain, the device intercedes. It sends low-frequency electric impulses to the part of the brain that receives and processes pain signals.

Within moments, patients feel pain free.

The idea behind NSS-2 is not new. Neuromodulators have been around since the mid-1960s.

Researchers found they could block pain by stimulating parts of the nervous system with electric impulses. Think of the process as a form of electronic acupuncture.

The NSS-2 innovation is delivery. A trained professional can adhere the device in minutes. It requires no surgery or narcotics. Symptoms are relieved almost immediately, allowing the patient to resume normal activities without restrictions.

And at an average cost of $600 per unit, it is cost effective.

That is a small price to pay to move people from addiction. According to a 2016 report from the American Society of Addiction Medicine, two million Americans were addicted to opioid painkillers, and 591,000 were addicted to heroin. During 2015, drug overdose was the leading cause of accidental death in the United States.

Newsweek recently reported that researchers at the University of Illinois estimate heroin use costs US taxpayers $51 billion annually. Spiraling costs for incarceration, healthcare, and lost productivity are widespread in afflicted communities. In Smalltown USA, these problems are catastrophic.

Ross County is a rural community of 77,000, one hour south of Columbus, Ohio. The county placed 200 children into state care in 2016. A shocking 75 percent of those children came from families with parents who were wrestling with opioid addiction. And caring for these children is more expensive because they require special counseling and therapy as well as longer stays.

For a tiny community, the $2.4 million price tag is a budget buster.

While NSS-2 will not wipe out the crisis, it will help. Opioid withdrawal is painful. Common symptoms include muscle aches and pains, vomiting, diarrhea, and uncontrollable shaking. Many addicts continue to use the drug because they deem it impossible to get through the withdrawal process.

The FDA has approved NSS-2 for opioid addiction treatment. And the Trump Administration has declared a national opioid crisis.

All this means more taxpayer money is coming into the system. It means more treatment, better quality of life for addicts, and healthier finances for ravaged communities.

The opportunity for investors may not be immediately obvious. Innovative Health Solutions, the company behind NSS-2, is a private company based in Versailles, Indiana.

However, several of the businesses likely to administer the devices and care for the patients are public companies. These are relatively small enterprises. The opportunity at hand will have a material impact on cash flow and profitability. It should also favorably impact shareholder value.

Down the value chain, expect insurers like Cigna and Aetna to be favorably impacted as well.

The opioid crisis is a blight on our culture. Thankfully, some help is on the way.

More direct but much riskier stock plays include Express Scripts (ESRX), a pharmacy benefits manager; AAC Holdings Inc. (AAC), a substance abuse treatment center operator; and Opiant Pharmaceuticals Inc. (OPNT), a developer of substance abuse pharmacological treatments.

Accenture Designs the New Healthcare Business Plan

Like most great businesses, Accenture was born out of competition.

Long before it got a fancy name, the company was Anderson Consulting, the business and consulting wing of the global professional services firm Anderson Worldwide Societe Cooperative, or AWSC.

AWSC was a fiercely competitive environment. Managers pitted divisions against each other to wring out inefficiencies and spur innovation.

For years Anderson Consulting went head-to-head with its sister company, Arthur Anderson, a global accounting firm. Under the AWSC charter, the more profitable business was to receive a bonus of 15 percent of the profits of the sister company.

But Arthur Anderson had a distinct advantage. It was a larger business with broader reach. And in 1998, managers at the accounting firm pushed the envelope by launching an internal business consulting division. Suddenly, two divisions inside AWSC were competing for the same clients.

Something had to give.

Anderson Consulting managers decided to stop paying the 15 percent penalty. They claimed both AWSC and Arthur Anderson had breached the contract. They took the entire matter to the International Chamber of Commerce.

In 2000, an arbitration agreement ensued. Anderson Consulting paid $1.2 billion and agreed to change its name. In 2001, Accenture, short for accent on the future, was born. Five months later, it became a public company, listed on the New York Stock Exchange.

The history of Accenture is important. Executives have always been forced to manage smaller than the company footprint. They have religiously cut costs to enhance profitability. It is in the corporate DNA.

In 2018, Accenture had 425,000 mostly professional employees. They service clients in 200 countries. In 2015, the company employed 130,000 people in India. Fifty thousand more were domiciled in the Philippines. It is not an accident. Professionals there are plentiful. Wages and rents are low relative to more developed countries.

In 2017, Accenture had gross income of $11.15 billion on sales of $36.77 billion. That puts gross margins at 30 percent.

Other financial metrics are equally impressive. Accenture has been able to achieve an average of 18.7 percent return on assets during the past five years. Over the same time frame, the return on equity is 56.4 percent. The return on invested capital is 55.9 percent.

And the very best part of the story is the future is even brighter.

The entire corporate world is beginning a digital transformation. Processes that used to be analog are becoming digital.

Accenture is running professional services on behalf of governments. In 2014, Accenture won a $563 million contract for software development and ongoing professional services for Healthcare.gov. In 2015 it was part of the winning group for a $4.33 billion contract for electronic health records, awarded by the Department of Defense.

These contracts are about digital transformation.

Accenture has other healthcare irons in the fire. It’s a big player in Population Health, or Care Management, that involves delivering cost-saving recommendations to a single payer, like the government, a corporate enterprise, or a health insurance provider.

If Accenture can deliver, it wins a share of the cost savings.

The idea is develop winning protocols. Accenture would use its long history of cost cutting to help with early detection, preventative measures, or strategies to reduce expensive emergency room visits.

According to Grandview Research, the size of the population health research—aimed at preventive care and promoting well-being—is expected to reach $89.5 billion by 2025. For perspective, in 2015, the market was worth $20.7 billion.

It is a market ripe for disruption. It’s a market Accenture is poised to win.

Winning is what Accenture does best. It is taking its digital transformation message to governments and corporations with stunning results.

According to the company fact sheet, Accenture claims 95 of the Fortune Global 100, and 75 percent of the Fortune Global 500. In other words, when big corporations turn to managing consultants, it is most likely Accenture.

Very often the company is running mission-critical operations on behalf of the client. And its reach spans every sector.

Financial results in the past few years have been rock solid, regularly beating analyst estimates, as growth accelerated across every part of the business.

Its work with financial services, communications, media, and technology firms is on the rise as more companies embrace digital.

The company is a winner, and managers are determined to create shareholder value by helping other large entities find their way thoughtfully and aggressively in the digital age. In addition to reporting strong results quarter after quarter, the company is an aggressive buyer of its common stock. It’s a buy on pullbacks.