FEATURING:

William Blair Global Research Analysts Tommy Sternberg, CFA, and Ben Loss, CFA

16
EditGenetics: Improving Lives

January 11, 2021 | 30:39

Harnessing technology to solve known problems in healthcare and food is something we’ve been exploring in depth. In the first installment of our Convergence series, which examines five growth themes that are shaping the future of investing, Hugo speaks with William Blair Global Research Analysts Tommy Sternberg, CFA, and Ben Loss, CFA, to discuss what we call “EditGenetics.”

Meet Our Moderator

Hugo Scott-Gall, Partner
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SHOW NOTES
00:40 Host Hugo Scott-Gall is joined today by two colleagues: Tommy and Ben.
01:17 Hugo begins the episode by asking Tommy about the growth area of genetic therapy.
03:10 Tommy takes a step back to define gene therapy.
04:29 The conversation turns to surprises and the addressable market.
06:13 There is much momentum in this area, but there are also some risks to bear in mind.
07:15 Not only biotech companies stand to benefit from growth in the field of genetic therapy.
08:14 Hugo asks about liquid biopsy, another genetic growth area.
11:19 What is the value of liquid biopsy? Tommy highlights three applications: therapy section, recurrence monitoring, and early detection and screening.
13:41 Turning to Ben, Hugo asks him why food is a growth area and what solutions he sees in this sector.
16:27 Nature is not standing still, but is resisting products used to increase farming yield.
17:12 There are areas of opportunity within the food growth market, such as biologic alternatives.
18:35 What needs to be solved to move from the early stages of capitalizing on growth opportunities to genuine penetration of the areas of opportunity?
20:39 Hugo asks Ben to comment on consumption of synthetic protein.
22:35 The conversation shifts to speeding up the process of gene selection to alter food.
23:10 What are the high-impact but currently low-probability things that could happen in each guest’s industry? For Tommy, the “moon shot” is longevity.
24:45 Ben has three moon shots to share, the first being vertical farming.
26:34 The next moon shot Ben shares concerns robotics.
27:27 Finally, Ben considers a third moon shot to be the use of microbes.
Transcript

Hugo Scott-Gall: Today, I’m joined by two of my colleagues, Global Research Analysts Tommy Sternberg and Ben Loss to discuss EditGenetics in the first installment of our Convergence series, which examines five growth things that are shaping the future of investing. This episode will address solving known problems and constraints with existing technology and explore new technology in healthcare, food, and biomaterials. So, Tommy and Ben, welcome. Thanks for being here. And let’s get started.

Ben Loss: Great to be here.

Tommy Sternberg: Yeah, thanks. Let’s do it.

Hugo Scott-Gall: Right. Let’s do it. Tommy, your voice was last, so I’ll pick on you first. In the work that we did around where to find growth, thinking about exactly the shape and profile of growth–across a number of industries—you spent quite a lot of time talking about the role of genetics in health and wellbeing. So, could you talk about that? And talk about gene therapy because I count myself amongst probably the majority who don’t really know a lot about gene therapy. What is it? Why is it important? And why is it one of your growth areas?

Tommy Sternberg: Yeah, absolutely, Hugo. So, when we took a look at the overall healthcare sector and some interesting growth areas for us to be further investigating, to where great companies are going to be driving lots of growth, yeah, absolutely genetics and our understanding of it really is driving multiple themes. In the area of gene therapy specifically, was a very interesting market for us. Now, for those avid listeners of The Active Share podcast, you may recall that we spoke quite a bit about gene therapies back in a previous episode that we did, “Is It Science Fiction or Is It Healthcare?”

So, back then, we introduced a number of what I’ve been referring to as new medicine modalities–so, completely novel types of medicines that are making tremendous medical breakthroughs. And we specifically introduced not only gene therapy, but also related modalities of cell therapy and gene editing. So, I won’t rehash all of those here.

But we did wanna specifically call out gene therapy on its own as this market is developing rather quickly. And there have been some significant developments since we had first introduced the topic, both on the medical development front as well as the corporate front in terms of IPOs, M&A, license agreements. So, there’s a lot of dollars changing hands here, a lot of investment in this area.

Maybe I should step back now and just briefly introduce or explain exactly what I mean when I say gene therapy. So, a gene therapy approach modifies existing genes or introduces new genes into a patient’s body, potentially leading to cures for genetic conditions. So, a common gene therapy approach would involve replacing a mutated gene that causes a disease with a corrected version, or a functional copy, of that gene.

And just to reemphasize, what’s fascinating here is that this approach is potentially curative because it addresses the underlying cause of a particular disease that is caused by a specific genetic defect. So, you’re not just treating the symptoms here. So, gene therapies, for instance, are being investigated in genetic disorders such as sickle cell disease, hemophilia, muscular dystrophy, and various eye diseases, and even congenital deafness. So, it’s a big opportunity and we can delve into that a little bit more, Hugo, in terms of the numbers and how we’re thinking about it from an investing standpoint as well.

Hugo Scott-Gall: Why do you think, then, that the growth could really surprise? Because it seems like we talk about TAMs, total addressable markets. And it seems the addressable markets could be pretty big given some of the conditions and diseases that you’ve highlighted there. When can the surprise come? Why can’t it come sooner? What are the things that are in the way?

Tommy Sternberg: Yeah, sure. So, let’s spell out the TAM a little bit and then we can talk to where perhaps some of the surprises may come from. So, in this exercise where we looked across the sector for big and growing markets, with big–that have big TAMs, as you said, TAM here is potentially as big as $4 trillion, which is almost unheard of and hard to really wrap your head around that and how much can they truly capture. We’ll see. But first of all, how do we even arrive at that number?

So, there are about 40 million people across the U.S. and Europe alone that have a rare genetic disease. And while that patient number alone is not as large as what you would see in other more common diseases, such as cancer or cardiovascular disease–but because these rare disease treatments come with very high price points, in some cases well north of $1 million, of course it’s incredibly high but can actually be justified from a pharmacoeconomics standpoint because of the value that is being brought for these patients due to the severity of these various diseases and what it could mean for their lives.

And, of course, the ultimate bill that’s being paid, even when you sum up this at the moment, is not nearly as large as some of those other disease areas that I mentioned. But when you do the math on that–and let’s just say you use a $100,000 price point, on 40 million people, that’s an incredible addressable market that we got to. So, that’s one of the reasons why we wanted to highlight this. But also, there’s a lot of momentum in this area. So, there are still only two recently approved gene therapies on the market, and this was the same as when we discussed this over a year ago.

But the momentum continues to skyrocket. At the beginning of the year, there were over 900 ongoing gene therapy trials in the U.S. And so, we’re likely to be well north of 1,000 today. Again, thinking of that baseline of just two approved therapies out there. Now, you asked about surprises. There are both surprises–both positive and negative. So, we need to be mindful of the risks here. And in recent months, there have also been some high profile discontinuations of some clinic trials, including patients dying.

So, the development path here for gene therapy as a whole is not linear, and that’s to be expected. But certainly the promise is there and there’s plenty of investment and momentum behind this opportunity. And then, I guess, one perhaps less obvious insight is it’s not just the biotech companies themselves that stand to profit from all the development in this area, but other business models that we like are those partners that work with the drug developers to help them with various services in terms of research development and manufacturing. So, these are really important enablers of growth in this fast growing industry.

So, I think we had some surprises that we were starting to uncover this area. For instance, just how expensive and how much manufacturing space is needed to come up with the raw material, the viral vectors–which is the raw material for these gene therapies–you start to get to pretty high numbers. So, that’s been one surprise to us that is leading to some investment insights for us as well.

Hugo Scott-Gall: Great, thanks. So, I guess one other area we’d like to cover, I’d like to ask you about is liquid biopsy, which you’ve said is again a growth area. So, could you talk about what exactly it is and why you see it as a growth area–and really, how much can it grow?

Tommy Sternberg: Absolutely. So, the area of liquid biopsy is another really burgeoning growth market. There’s lots of investment in this area from big companies, small companies, public, private. And just to explain a little bit of what it is, and then we can speak to the type of growth opportunity that we’re seeing here more broadly. But the value proposition here in terms of the problem that’s trying to be solved is readily apparent.

So, most cancers are simply detected too late. So, early detection can increase cancer survival rates vary substantially, depending on the cancer type and the data you’re looking at, perhaps up to three times to 12 times of an increase in survival rates, depending on when cancer is first detected. However, for an otherwise healthy patient, it’s not going to be practical. It’s not going to be cost effective, or even really justified medically necessarily, to perform a tissue-based biopsy on various organs if there’s no medical reason to do so.

But that’s why imaging, screening–such as mammograms and other procedures, like colonoscopies–I mean, these have had massive impacts on cancer detection if you go back decades. But there’s still so much more that can be done. And that’s really the promise of the simple, blood-based test, that could detect whether you might have an early stage cancer. And the medical, as well as societal, value of such a test would be enormous.

I would understand if there might be a bit of skepticism here, particularly for anyone who’s familiar with the Theranos story, if you’ve read the book Bad Blood, or if you’ve seen the movie that profiled Elizabeth Holmes and Theranos. Right, great promise of curing everything with just a prick of your finger. But there’s a reason to be somewhat skeptical of this. But, in fact, I think what might surprise many people is we’re actually closer than most people think for this to actually become a reality.

So, just for a little bit of history here. So, the first liquid biopsy test was approved in 2016 and it was able to detect a specific type of mutation in a tumor, which is important because not all types of cancers, even if it’s in the same organ, are the same. So, when a specific type of mutation can be identified, then one type of drug might be more effective in treating that cancer, as many cancer therapies are actually developed, to target some of these mutations.

So, while this type of test was readily available as a tissue-based diagnostic, using a blood-based test has some advantages–for instance, in cases where the tissue is difficult to be biopsied. It’s also easier to repeat the test if necessary. So, just stepping back, what is the value here, then of having this blood-based or liquid biopsy available? Well, there’s three primary applications here. The first is therapy selection. So, that’s the example I just walked through.

Another application is recurrence monitoring. So, that’s actually a pretty big deal. It’s way easier to monitor recurrence for existing patients who have maybe already received treatment–to be able to do that with a blood-based test compared to a tissue biopsy. Then, you get more of a real-time, more of a longitudinal view, of where the cancer’s at and whether it is recurring. And then, of course, the biggest potential application is, of course, early detection or screening, which I mentioned at the outset.

So, Hugo, you asked about the growth opportunity, and to walk through what it means here. So, we’ve sized the liquid biopsy market today at around $600 million. It’s certainly south of $1 billion. But the total addressable market we sized at $50 billion. So, and actually, since then, we’ve seen subsequent estimates because there have been some recent activity in the space, valuing it up to $75 billion by 2035. But either way, you’re looking at a market that’s maybe 1% penetrated. And it’s already growing pretty fast.

We see the five-year CAGR around 40% or so. And that’s without having tapped into the largest segment, which is that early detection. And again, early detection is going to be–make up the vast majority of that $75 billion or $50 billion market opportunity several years down the road.

And one final point here is that, while we don’t have an approved test for early screening, again, very close here. One of the largest companies in the space is expected to have a test available on the market as soon as next year, in 2021. So, liquid biopsy, really exciting space. Lots of excitement. A lot of action. Lots of opportunity.

Hugo Scott-Gall: Great. Thanks. Well, that’s a very obvious solution to an important problem. So, on problems to solve, Ben, I’m wanna bring you in because I guess one of the growth areas you highlighted–and I guess this is a recurring growth area–but the growth in the world’s population means that we need to produce more food without increasing cost. So, could you talk about why right now that’s a particularly interesting growth area, and what are the solutions that you think are making it so attractive?

Ben Loss: Yeah, sure, Hugo. I think probably, to start off, just a little bit of historical context can give people a window into how we got to where we are today and how that informs the needs of tomorrow. So, we still have an increasing population. You see some of the developed world not increasing as much, but you still have strong growth in emerging countries. And so, while population growth may not be as strong as it historically has been, it’s still present.

But even if we were to relax that assumption, there are still very strong growth opportunities. So, starting from about the 1800s we’ve added about 7 billion people to the planet, two-thirds of which has come since 1950. So, this is quite explosive growth relative to the trajectory that we were on. And over that time period, we’ve actually seen land use for agriculture decrease. The U.S. is down roughly 12 percentage points over the last 50 years.

So, you look at those two things and you say, “Well, how do you reconcile this?” And you reconcile it by the fact that we’ve seen, on a cumulative basis since the 1950s, a 70% increase in farm productivity. Essentially, if you were to go back to the 1950s, you can draw a 45-degree line and that’s the increase that you would see in yields. And looking back from that, you would see very little improvement. So, we had this very strong increase that came with some cost that we’re learning more about each day. So, we added fertilizers. We added a series of agricultural chemicals.

And then, we learned better farming methods, better irrigation, etcetera. But now, we’re seeing that that had some cost, both on the human health side as well as the environmental side. So, now we’re looking to reformulate and rectify some of those problems. But at the same time, we need to ensure that we’re gonna have healthy and sustainable food for a global population. And then, as we look forward, the incremental growth, given the base effect from a larger population, we’re probably gonna need to see a 30% increase in farm productivity over the next several decades.

So, very strong demand for the industry. And so, this has created what I’m talking about as a sort of dual mandate. So, it’s continued to increase productivity but in a healthier way for the people on the planet. And then, running in conjunction with this, is the fact that nature isn’t standing still. So, we’ve seen bugs, fungi, etc. develop resistances to a lot of these products that have enabled this explosive growth and yield. And so, even if we were to put aside these other concerns, we are seeing natural resistance develop and we’re gonna need to combat that somehow.

And you can look at Roundup, or glyphosate, as it’s known, which is a pretty common example that people see as one area where crops are starting to develop significant resistance to. So, this mandate creates a lot of opportunities that we see. And so, this is across a $5 trillion global market. I know Tommy talked about $4 trillion. This is a little bit bigger. And so, when you look across these opportunities, this is a very prominent theme that we see a cross the sector.

So, one area is these biologic alternatives. And this can be either a full-on replacement of chemicals or it can be a supplement to something that’s already in place. And the predominant way that this has manifested itself in the market is through coatings on seeds. And these can do a whole host of things, to protecting the crop from insects or disease, requiring less chemicals, or it can do things like enhancing nutrient uptake, which is gonna require less need for fertilizers. And that’s gonna result in better yields and ultimately a healthy planet because those fertilizers generate a lot of emissions in their production process.

So, very strong growth there. And this is–also can be harvested across the animal market. So, the protein chain, where we’re using a lot of these biologic alternatives along with combating antibiotic resistance, which is similar to the crop resistance we talked about–but just optimizing the gut health of animals to make the yield conversion from feed to protein optimal. So, there’s a lot of challenges here. There’s a lot of solutions that are coming. But this is still very much in the early days.

Hugo Scott-Gall: And, again, what are the things that need to be sold? What are the impediments to make us move from early days to some kind of genuine penetration?

Ben Loss: Yeah, so, there is just this sort of nature of the industry. So, we generally have one growing season a year, outside of a couple select markets. And farmers are, by nature, a conservative group of people. So, it takes time to really convince them of new solutions. But we are seeing that come into the market. If you look across the biologic segments of a number of companies that are reporting growth between 20-50%, most of them–so, it is happening. But this is coming off of a small base. If you look at certain markets there, every acre of some crops does have a biologic product of some sort.

But now that we’re seeing more of this crop resistance, as well as legislation coming forward as we learn more about the harmful effects of a number of these chemicals, that’s gonna really cause an inflection point. And so, companies that are well positioned with products in these areas are–should do quite well. The other thing–and this connects with why these are attractive businesses is it’s not enough to just know that there is a microbe, or the bioproduct of the microbe, the enzyme, that is useful. But it’s very hard to produce consistent scalable quantities of this.

And so, that’s part of the challenge here. It’s not just like fermenting your favorite beer. There’s a lot that goes in–involved with this as well as making sure that the microbes stay alive to get to where they need to get to and that they’re still in sufficient quantities and they can survive transport and various other environmental impacts. So, there’s a lot around that that continues to need to improve to be able to produce the quantities that we’re gonna need across the farm complex.

Hugo Scott-Gall: Great. So, related to this demand for more food, can we talk a little bit about synthetic protein and how you think the market for protein will change in terms of organic versus synthetic? And again, what are the other barriers? What is stopping synthetic protein becoming a much bigger part of that mix?

Ben Loss: Yeah. So, I think consumer taste does play a role in this. But when we look at the challenges of growing meat, there’s a lot of scientific breakthroughs that still have yet to occur there. It’s quite tricky to replicate the bone and other structure that we see within an organism and exporting that outside and growing the muscle tissue around it. I think we have a sense of how the muscle component of it works, but it’s that other part that seems to be holding us back.

And then, obviously, these are still gonna require resources to grow and figuring out how to properly source that, either if it’s from the natural process of a cow out on pasture versus importing that into the lab. There’s just a lot of technical challenges to overcome. But one area–and this ties into some of what Tommy was talking about–is biologics as it relates to seeds and this CRISPR technology. I’ll spare you what the acronym actually means because I oftentimes forget myself.

But basically, what we’re seeing here is the ability to take what we’ve been doing for generations–which is naturally selecting for the traits that we see as desirable. If you look back several thousands of years ago, the strawberry that we would see back then, or the stalk of corn that we would see back then, would be unrecognizable. This has all been done by generations of us selecting for traits that are optimal for what we’re trying to achieve.

And so, CRISPR is basically a way of just speeding up that process, taking thousands and millions of years and condensing it down into very short periods. So, this is another very interesting way of getting about this problem. And it does–in many ways, it’s talking more about silencing and the removal of genes from the existing organism rather than inserting new ones in, which is what much of the GMO debate has been about.

Hugo Scott-Gall: Great. Thanks, Ben. So, I wanna ask both of you the moon shot question. By that, I mean, what are the high impact but currently low probability things that could happen in your respective industries? So, Tommy, you go first. Give me something whacky. Give me something that right now feels unlikely and a bit out there, but just could, just might happen.

Tommy Sternberg: Yeah. I mean, one area that I’m interested in that’s not super close, or high on our radar screen, but could perhaps accelerate as potentially–in terms of the innovation, and maybe even in investment–from an investment standpoint as well is longevity. And the use of artificial intelligence machine learning combined with the raw power of genome sequencing, as the cost has come down substantially, the speed has gone up. The advent in the use of CRISPR and other gene editing technologies that Ben mentioned–applying all these things, and other interesting discoveries around certain cells that don’t necessarily die as quickly as others.

And looking into those to slow down the aging process, I think, is a fascinating area of research. We’re still in early days, but who knows? At some point in the coming years, when–we may see breakthroughs in that area. So, I think that’s an interesting area–sort of a moon shot–to pay attention to.

Hugo Scott-Gall: Ben? Can you match that?

Tommy Sternberg: He’s not only gonna match it. He’s gonna one-up me, I’m sure, just based on the–I throw out a $4 trillion TAM. Ben throws out a $5 trillion TAM. Don’t think that didn’t go unnoticed.

Ben Loss: Yep. Yep. I was waiting for that response. So, I think there’s three moon shots that are worthy of inclusion.

Hugo Scott-Gall: You’ve got three to Tommy’s one.

Tommy Sternberg: That didn’t take long. That didn’t take long. Just right away. Boom. Three to one.

Ben Loss: Next time, it’ll be nine. So, the first one, I would say, is vertical farming. So, I think this is gonna be a nice buffer, or just compliment, to all of the biologic revolution, use of CRISPR, better seeds, etc. that can ensure that we don’t have any sort of food shortages. So, when you think about vertical farming, what would the advantages be? It would be controlled environment, be close to the demand centers, and it would offer continuous production because, obviously, it’s indoors and you don’t have to worry about seasons.

This is also interesting from a big data–sensors, advance materials. There’s gonna be a lot of neat innovations that need to happen there. It’s not like it’s gonna overwhelm traditional agriculture. It’s likely gonna be limited to certain crops–mostly it’s things like lettuce and similar crops. But that’s certainly an area to watch. So, you could say, “Well, why aren’t we doing more of it now?” Because it costs a lot of money to replicate the sun, which is free when you’re outside. So, as renewable energy costs come down, those vertical farms becomes closer and closer to in the money. So, I think that’s something to watch.

And then, another piece would just be–we’re seeing this across a number of industries, but robotics. And so, obviously, as I talked about before, nature plays this game where it’s fighting back against the things that we try to do. This will be true on the biologic side as it has been in the synthetic side. But it’s gonna be quite hard for weeds to evolve a way to get around a metal sphere or fork that’s walking through the rows and spearing them and taking them out of commission.

You can find some fun videos online about various robots and working through that. And so, there’s gonna need to be a lot of innovation for those camera modules, etc. to be able to recognize weeds and other harmful things versus the crop. But that’s one way to get us back to organic farming, but without a lot of the cost.

And then, the third piece, I would say, is we talked a lot about microbes and their use on animals and plants. But then, their potential on the human side. So, thinking about this as bugs, as drugs kind of thing. This could be a next frontier in medicine where we finish the human genome and now we’re thinking about the human microbiome, which is essentially all the bacteria that live inside us for mutual benefit, evolving and thinking about human beings as a system.

So, we’ve already seen good evidence of certain microbes and their ability to basically alleviate peanut allergies. But there’s a lot of promising data cross a whole host of things, including cancer. So, I think that’s something that’s certainly an emerging trend where you’re seeing a lot of R&D dollars go into therapies across this area. So, there’s my three moon shots.

Hugo Scott-Gall: Thank you for that. I must admit, when I was growing up, I used to think farmers were farmers. Little did I know they were horizontal farmers. But thank you both very much for sharing just a few of your insights around where to find growth. Really interesting stuff, funky stuff. I think Ben wins on the moon shots. But with that, I’m gonna say thank you to you both and thank you for listening.

Ben Loss: Thanks for having us.

Tommy Sternberg: Thanks, Hugo.

Meet Our Moderator

Hugo Scott-Gall, Partner
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No William Blair post published on any social media platform is an offer to sell or a solicitation of an offer to buy shares of any William Blair investment product to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Additionally, all William Blair posts published on any social media platform are for informational purposes only and should not be considered as investment advice or recommendations to invest in any particular security, strategy or investment product.

William Blair posts on social media may include statements concerning financial market trends, and are based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. Historic market trends are not reliable indicators of actual future market behavior or future performance of any particular investment which may differ materially, and should not be relied upon as such. The investment strategies and broad themes discussed in William Blair’s social media posts may be unsuitable for investors depending on their specific investment objectives and financial situation. Information contained in posts has been obtained from sources believed to be reliable, but not guaranteed. You should note that the materials on the social media platforms are provided “as is” without any express or implied warranties. Past performance is not a guarantee of future results. All investments involve a degree of risk, including the risk of loss. No part of William Blair posts may be altered without express written permission from William Blair.

William Blair posts may provide links to third party websites only as a convenience and the inclusion of such links does not imply any endorsement, approval, investigation, verification or monitoring by William Blair of any content or information contained within or accessible from the linked sites. While we make every attempt to provide links only to those websites we think are trustworthy and accurate, we cannot be responsible for the content or accuracy of the information presented on those websites and we specifically disclaim any liability for any loss or damages which you may incur, directly or indirectly, as a result of your use of them. We reserve the right to terminate a link to a third party website at any time.

General User Guidelines

Due to the highly regulated nature of our industry and as a matter of policy, William Blair, in some instances, may not reply to user comments. Please ensure that your contributions in relation to any William Blair posts are relevant and topical. Do not publish your own advertisements of any kind on any William Blair social media page or with respect to any William Blair posts. We ask you to be respectful and courteous and refrain from publishing, including through hyper-links, inappropriate or offensive material on any William Blair social media page. Do not attempt to promote investments (this includes posting testimonials, giving investment advice, or making recommendations about specific securities, securities strategies, products or services) on any William Blair social media page. Do not attempt to submit to William Blair any personal, confidential or account information through any William Blair social media page. William Blair is not subject to any obligations of confidentiality regarding information submitted to them through any William Blair social media page or otherwise through any social media platform.

Third-Party Posts on any William Blair Social Media Page

While William Blair may monitor third-party posts published on any William Blair social media page, such posts may be reviewed to ensure regulatory compliance, but otherwise are not edited before being displayed. Third-party posts on any William Blair social media page are the view and responsibility of the third-party, not William Blair. William Blair cannot guarantee the appropriateness, accuracy or usefulness of any third-party posts or of any third-party hyper-link, nor are they responsible for any unauthorized or copyrighted materials contributed by a third-party in any William Blair social media page. William Blair reserves the right to remove or edit any third-party posts or comments on any William Blair social media page that are inappropriate or that violate (or may violate) applicable regulations.

William Blair does not publish or otherwise disseminate statements relating to current or former clients’ positive experiences with or endorsements of William Blair and expects you to refrain from publishing such posts on any William Blair social media page. You should limit your posts on any William Blair social media page to investment themes rather than commenting, positively or negatively, on William Blair, its products, services or personnel. Although our clients may follow this account, this should not be interpreted as a testimonial regarding any client’s experience with our firm.

Any descriptions of, references to, or links to other products, publications or services do not constitute an endorsement, authorization, sponsorship by, or affiliation with William Blair with respect to any hyper-linked site or its sponsor, unless expressly stated by William Blair. William Blair expressly disclaims any responsibility for the posts, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites, as posted by third-parties on any William Blair Social media page.

Use Social Media Platforms at Your Own Risk

William Blair is in no way affiliated with any social media platform and has no responsibility for any social media page’s operations and services. William Blair and their respective affiliates, directors, officers, or employees are not liable for any direct, indirect, incidental, consequential, punitive or special damages arising out of or in any way connected with your access or use of, or inability to access or use, a social media platform, any William Blair social media page thereon or reliance on any William Blair post or any failure of performance, interruption, defect, delay in transmission, computer viruses or other harmful components, or line or system failure associated with a social media platform or any William Blair social media page thereon. Use of a social media platform or any William Blair social media page thereon is at your own risk.

Privacy Policy

William Blair is not responsible for the terms of use or privacy policies of any social media platform on which William Blair posts may appear, including in any William Blair social media page. For additional information regarding account security and privacy, refer to our Privacy and Security statement

Copyrights and Trademarks

Each social media page’s content and information, and all trademarks, service marks, trade names, trade dress, logos, copyrights and other intellectual property displayed on the Site by William Blair (“Content”) are protected by U.S. and worldwide copyright and trademark laws and treaty provisions, and are owned by, controlled by or licensed to William Blair or their respective owners. By using any social media page, we do not grant you any rights to reproduce, sell, or license any of the content contained herein, except that you may print a copy of the information contained herein for your personal use only. You may not reproduce or distribute the text or graphics to others or copy all or substantially all of the content to your own hard drive or server without the prior written permission of William Blair.

Permitted Uses of Our Sites and Content

We have listed below the permitted uses of our Content. We reserve the right to change our permitted uses at any time.

  • William Blair grants you a limited, revocable, nonexclusive and nontransferable right to view, store, bookmark, download, copy and print pages from the Site for your personal and noncommercial use only. Unless you receive our permission in advance, you may not exploit any of the Content commercially or forward it as a mass distribution.
  • If you link other websites to any Site, you may not imply or suggest that William Blair has endorsed or is affiliated with such websites and you may not display this Site as “framed” within another website.

Prohibited Uses of Our Sites and Content

William Blair does not grant, by implication, estoppel or otherwise, any license or right to use Content on any social media page other than those set forth above, and you shall not make any other use of such Content without William Blair’s written permission. Without limiting the generality of the foregoing:

  • You agree not to copy large portions of any social media page (such as by bots, robots or spiders that “harvest” the Site), interfere with the functioning of the Site or restrict or inhibit any others from using the Site.
  • If you download any pages from any social media page, you agree that you will not remove or obscure any copyright or other notices or legends contained in any such Content. You may not alter or modify the Content in your copies.
  • You may not (and may not encourage or assist others to) violate any law, regulation, rule or the intellectual property or contractual rights of others, or attempt to violate the security of any social media page or use or gain access to the identities, information or computers of others through any social media page.
  • You may not transmit any virus, worm, time bomb or similar system interference or corruptant through any social media page.

William Blair has the right (but not the obligation) to monitor any social media page for unauthorized or objectionable conduct and to take all appropriate actions in response, without notice to you. We reserve the right to change or supplement our website policies at any time to the fullest extent permitted by applicable law.

Forward-Looking Statements

Statements made on any social media page that look forward in time involve risks and uncertainties and are forward-looking statements. Such risks and uncertainties include, without limitation, the adverse effect from a decline in the securities markets or a decline in William Blair’s products’ performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability of William Blair to attract or retain key employees, unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations.

Forward-looking statements reflect our current views with respect to, among other things, the operations and performance of our businesses. You can identify these forward-looking statements by the use of words such as “outlook,” “believe,” “expect,” “potential,” “continue,” “may,” “should,” “seek,” “approximately,” “predict,” “intend,” “will,” “plan,” “estimate,” “anticipate” or the negative version of these words or other comparable words. Forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

International Use

The Content provided in or accessible through any social media page is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject William Blair to any registration or other requirement within such jurisdiction or country. William Blair reserves the right to limit access to the Site to any person, geographic region or jurisdiction. Unless otherwise expressly set forth herein, William Blair makes no representations that transactions, products or services discussed on or accessible through the Site are available or appropriate for sale or use in all jurisdictions or by all users, or that access by any user in the place it is located is not illegal or prohibited. Users who choose to access the Site from other locations do so on their own initiative and are responsible for establishing the legality, usability and correctness of any information or Content on the Site under the laws of any applicable jurisdictions. You may not use or export the Content on the Site or accessible through the Site in violation of applicable laws and regulations.

Transmission to and From any Social Media Page

Subject to any applicable terms and conditions set forth in our Privacy and Security Statement, any communication or other material that you send to us through the Internet or post on any social media page by electronic mail or otherwise, is and will be deemed to be non-confidential as between you and us and William Blair shall have no obligation of any kind with respect to such information. William Blair will be free to use, for any purpose, and without compensation due or payable to you, any ideas, concepts, know-how or techniques provided by you to William Blair through any social media page.

Disclaimer and Indemnity

William Blair and its affiliates disclaim, to the fullest extent permitted by law, all express and implied warranties of merchantability, fitness for a particular purpose, and non-infringement. If you live in a state that does not allow disclaimers of implied warranties, our disclaimer may not apply to you.

William Blair does not warrant that the information in any social media page is accurate, reliable or correct, that any social media page will be available at any particular time or location, or that any social media page is free of viruses or other harmful components. Electronic communications can be intercepted by third parties and, accordingly, electronic mail and other transmissions to and from any social media page or made via any social media page may not be secure.

The investments and strategies discussed in the content may not be suitable for all investors and are not obligations of William Blair or any of its affiliates or guaranteed by William Blair or any of its affiliates. The investments are not bank deposits and are not insured by the Federal Deposit Insurance Corporation or any other entity and are subject to investment risks, including the loss of the principal amount invested. Nothing contained on the Site constitutes investment, legal, tax or other advice nor is to be relied on in making an investment or other decision. You should obtain and carefully review any applicable prospectus, statement of additional information and/or offering memorandum as well the William Blair Form ADV, as applicable, before making any investment decision. Decisions based on information or materials contained on any social media page are the sole responsibility of the user.

As consideration for access to any social media page, you agree to indemnify and hold harmless William Blair and their employees, contractors, affiliates, officers and directors from and against any claims whatsoever and of any nature for damages, losses and causes of action, including but not limited to actions by third parties against you, William Blair or any of its Related Person, arising out of or in connection with any decisions that you make based on such Content, your use of any social media page, or your violation of our website policies. You agree to make William Blair, whole for any and all claims, losses, liabilities, and expenses (including attorneys’ fees) arising from your use of the Site or any violation of this the policies laid out in this Disclaimer, unless prohibited by law.

Miscellaneous Provisions

YouTube, Facebook, LinkedIn, Twitter, and any other social media sites are public sites. William Blair is in no way affiliated with them and has no responsibility for their operations and services or for related service sites. William Blair is not responsible for any social media platform’s terms of use or privacy or security policies, or any other third party sites that may be linked to by a social media platform. By using a social media platform, you accept at your own risk that the Internet and online communications medium may not perform as intended despite the efforts of William Blair, your Internet Service Provider, and you.

For additional information regarding account security and privacy, refer to our Privacy and Security statement. For customer service inquiries or questions about your accounts, please visit our website at: www.williamblair.com.

Your Acceptance of these Terms

Your use of the Site constitutes your acceptance of the terms contained herein. You may reject these terms by leaving the Site at any time.

For additional information about William Blair or to contact us, please visit our website at: www.williamblair.com.

Glossary

INDICES
The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid ARM pass-throughs), asset-backed securities, and commercial mortgage backed securities.

The MSCI ACWI IMI Index is a free float-adjusted, market capitalization-weighted index that captures large, mid, and small cap representation across developed and emerging markets.

The MSCI ACWI ex-US IMI Index is a free float-adjusted, market capitalization-weighted index that captures large, mid, and small cap representation across developed and emerging markets, excluding the U.S. The Value and Growth Indices are a subset of the Index that adopt a framework for style segmentation in which value and growth securities are characterized using different attributes. Multiple factors are used to identify value and growth characteristics.

The MSCI ACWI Small Cap Index is a free float-adjusted, market capitalization-weighted index that captures small cap representation across developed and emerging markets.

The MSCI Emerging Markets Index is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of emerging markets.

The MSCI World Index is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of developed markets.

The Russell 2000 Index is a market capitalization-weighted index designed to represent the small cap segment of the U.S. equity universe.

Index performance is for illustrative purposes only. The indices are unmanaged, do not incur fees or expenses, and cannot be invested in directly.

TERMS
Alpha is a measure of an investment's return in excess of the market's return, after both have been adjusted for risk.

Beta is a measure of the volatility of an investment relative to the overall market, represented by a comparable benchmark.

Half-life is a statistical measure of the time required for the discrepancy between price and value to contract by half of its starting value. Fundamental value estimates are based on the Dynamic Allocation Strategies team's proprietary research.

P/E Ratio is a measure of valuation which compares share price to earnings per share, calculated using estimates for the next twelve months.

Standard deviation is a statistical measurement of variations from the average.

QUANTITATIVE MODELS – FACTOR DEFINITIONS
The William Blair Earnings Trend Model captures information about short- and medium-term changes in analyst estimates in an attempt to anticipate future estimate changes and stock performance. The score combines measurements of earnings revisions, momentum, and earnings surprise.

The William Blair Valuation Model combines varying metrics used to characterize the relationship between the stock’s trading price and its intrinsic value. By going beyond using only one or two measures, the model attempts to build a more holistic version of a stock’s worth vis-a-vis the market. The score combines measurements of earnings/cash flow based, asset-based, and model-based factors.