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Visitors could be forgiven for mistaking the offices of crossover fund RA Capital Management, near Boston’s theater district, for those of a technology start-up. A gleaming white entryway, liberal use of standing desks and a well-stocked communal kitchen are the setting for a team of researchers, analysts and designers poring over numbers and charts. The vibe practically screams “disruption” and “innovation.” A closer look at a large collection of blown glass lining the hallways reveals reproductions of individual virus molecules by British artist Luke Jerram. There’s Ebola, E.coli, HIV and even avian flu. They lead to a bright conference room dominated by a large screen displaying slide after slide of colorful and intricately detailed maps that may hold the keys to curing those diseases and more.

Bringing to mind Steven Spielberg’s science fiction thriller Minority Report, RA Capital’s 39-year-old co-founder and portfolio manager Peter Kolchinsky, who has a Ph.D. in virology from Harvard University, manipulates a touch screen showing colorful blocks of text distilling everything that currently is known about diseases such as breast cancer, hepatitis C and Huntington’s disease. His firm is invested in various drugs targeting specific molecular mechanisms that trigger disease, but Kolchinsky sees the real potential in the black space of what’s unknown about these conditions. Thanks to the confluence of increasing demand and scientific innovation, roadblocks to understanding and treating disease that seemed insurmountable a decade ago have turned into opportunities that could both save lives and be incredibly lucrative for the right investors.

About 200 miles away, in New York, Internet entrepreneur Unity Stoakes is building a small empire of health care technology start-ups in the former headquarters of Goldman Sachs Group. On the 29th floor of 85 Broad Street, a chunk of cozy, hardwood-floored offices owned by coworking-space developer WeWork has been set aside for companies that are part of the StartUp Health network. Since launching in 2014 the network has grown to include 117 companies in more than 50 cities around the world that promise to do everything from in-home dialysis treatments to medical fraud prevention through biometrics. In a small furnished room that soon will become a studio for recording podcasts, Stoakes, the network’s co-founder and president, preaches the gospel of creative destruction. Health care is the only major industry, aside from education, that hasn’t been meaningfully disrupted and forced to re-create itself as a result of new technology, he says. That is changing.

Kolchinsky and Stoakes represent dual revolutions that are propelling health care into a new era of personalized, consumer-oriented, data-driven medicine. At the edges of RA Capital’s maps are the treatments and therapies that will fill health care investors’ portfolios in the months and years to come. StartUp Health’s network comprises dozens of companies ready to change the way doctors and individuals communicate about, monitor and address health concerns. Not all of these companies will succeed, but continuing advances in science, coupled with recent regulatory, cultural and demographic shifts (see “ The Silver Tsunami”), have created a convincing optimism that the overwhelming trend is toward more-expedient and successful diagnoses, treatments and cures. For investors interested in capitalizing on this disruption, this means looking beyond hot-button issues like drug prices and a potential biotech bubble to the science and technology that have transformed so much in the sector from empty promise to reality in the past few years.

“You are seeing literally every aspect of what’s possible be changed in terms of our health care,” Stoakes says. “It’s not working on a linear path; it’s working on an exponential curve.”

It took 13 years and $2.7 billion to sequence the first human genome. Today it can be done in a few hours for a few thousand dollars. Just three years ago hepatitis C was for many patients a life sentence to immune system–weakening treatments for a chronic disease; now studies of new drugs indicate a cure is possible within three months of treatment. Researchers are learning not only how to identify which genes might be contributing to a patient’s disease and the mechanisms by which they are doing it but also how to edit those genes to alleviate symptoms and implement cures. On November 30 researchers from the San Francisco–based J. David Gladstone Institutes released new findings that show a connection between the BRCA1 gene — a mutation of which is known to increase a patient’s chance of developing breast cancer — and Alzheimer’s. Researchers now know that BRCA1 proteins not only cause cells to multiply, they interact with neurons, which are depleted rather than divided. This could lead to better prevention and treatment for one of the most baffling brain-related diseases.

“We’re just now starting to see the fruits of genomics,” says Michael Ringel, global leader of research and product development at Boston Consulting Group, who is studying ways of valuing new methods and outcomes of health care. “The depth of understanding of disease is opening up whole new avenues of treatment.”

Provider- and consumer-focused technologies that may sound to some like science fiction — helmets that can detect concussions in real time, pill bottles that tell your doctor if and when you’ve taken your medication — are now in use, and scientists have the capability to do even more. At the same time, individual consumers are becoming increasingly interested in and capable of tracking their own health. The implementation of the Patient Protection and Affordable Care Act (ACA) has shifted more of the cost of care onto patients as insurers lean on high-deductible plans, giving a new generation of consumers already caught up in a culture of wellness additional incentive to tune into their own health.

“This market is bigger than any company I can imagine,” says angel investor Esther Dyson, who has been funding wellness-related entrepreneurs since early 2007.

The U.S. health care market pulls in about $2.8 trillion in annual revenue, according to PricewaterhouseCoopers, and health care indexes have long outperformed the broader S&P 500. Though the ACA has had its stumbles, it has added more than 10 million people to the U.S. health care system through exchanges and an additional 12 million through Medicaid expansion, and the bulk of the changes the ACA has made to the system are likely to remain in place regardless of who succeeds Barack Obama as president. But 2015 was undeniably difficult for health care investors. Stocks in the sector — especially, traditional drug companies and biotechs — had a volatile year, thanks in large part to a growing chorus of objections to drug pricing practices.

In September a young former hedge fund manager named Martin Shkreli became the face of the U.S.’s drug cost problem when his company, New York–based Turing Pharmaceuticals, made headlines for raising the price of an old toxoplasmosis drug by more than 5,000 percent overnight. Hillary Clinton’s response on Twitter, calling the move outrageous and promising a plan to stop such “price gouging,” sent health care stocks tumbling. The S&P 500 Health Care Index dropped 5.8 percent in one week. Major biotech players BioMarin Pharmaceutical and Biogen both lost more than 6 percent in one day.

Turing didn’t pull down the market single-handedly. At about the same time, Laval, Canada–based Valeant Pharmaceuticals International came under fire for its own pricing practices and its relationship with a network of specialty pharmacies that allegedly pushed only Valeant’s drugs. The company’s stock fell 71 percent between September 18 and November 17.

Most health care investors, no matter how smart they were, felt the blow from this sell-off. One of Greenwich, Connecticut–based Viking Global Investors’ funds — the Viking Long Fund, which had about 43 percent of its assets invested in health care — lost 7.9 percent in the third quarter. The hedge fund firm owns almost 5 million shares of Valeant. But even those not invested in Valeant felt the contagion: Dublin-based Allergan lost 13 percent in the last week of September, and Teva Pharmaceutical Industries, an Israel-based drugmaker, fell more than 10 percent that same week. In a letter to investors at the end of October, Glenview Capital Management founder and CEO Larry Robbins, whose hedge fund firm owned both Allergan and Teva, admitted that its health care positions had “failed to protect your capital, and mine.” Glenview, which also was hurt by a drop in shares of Chicago-based pharmaceuticals company AbbVie, was down 13.5 percent for the first nine months of 2015, according to an HSBC Hedge Weekly report.

The past year’s experiences showed that even a bet on a company with solid fundamentals and a pipeline of evidence-based therapies or technologies can be subject to the dips and dives of the volatile market. Investors who remember the biotech bubble of 2000 or got hurt in the recent market stumble may not want to jump into these turbulent waters now. But for those with access to, and a good understanding of, the science just beyond the headlines, the opportunities may be too hard to pass up.

“The ’90s were really a stepping stone,” says Oliver Marti, who manages CCI Healthcare, the team at Stamford, Connecticut–based Columbus Circle Investors responsible for the firm’s $1 billion health care strategy. “Over the past few years, we’ve started to see a lot of the companies whose pipelines hadn’t fully matured entering a new product cycle that I think was underestimated by Wall Street.”

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