Revolutionary, game-changing, groundbreaking.

These words are probably used too often in describing new innovations. The reality is that most new products and technologies don't live up to the hype. But some do. And in a few rare cases, those descriptions could possibly even be understatements. Gene editing is one of those cases.

It's probable that gene-editing technology will generate a tremendous amount of wealth over the next few decades for investors. Gene editing also holds the real potential to change the world as we know it. Seriously.  

Hand holding scissors removing small section of DNA

Image source: Getty Images.

What is gene editing?

Gene editing is the insertion, deletion, or replacement of DNA in a cell or organism. As you probably remember from your long-ago biology classes, DNA (deoxyribonucleic acid) carries the genetic blueprint used in the development and functioning of every living thing on earth. DNA consists of two strands wrapped around each other to form a double helix. Each strand is made up of a combination of four base molecules: cytosine, guanine, adenine, or thymine. These bases are abbreviated by their first letter -- C, G, A, and T.

Genes are sections of DNA that specify how proteins are built based on the unique sequence of the four DNA bases. How those proteins are built defines every physical characteristic of a living thing.

The first method of gene editing was published in a scientific journal in 1991. This method, known as zinc finger nuclease (ZFN) technology, created genomic "scissors" made up of engineered proteins that scientists used to cut DNA at specific locations. ZFN had some problems, though. Some sequences of bases in DNA couldn't be targeted for editing. ZFN was also difficult to engineer and expensive to use. 

In 2009, another method of gene editing called TALEN came along. TALEN stands for "transcription activator-like effector nuclease." This method was similar to ZFN but allowed more specific targeting of sections of genes. 

The biggest breakthrough in gene editing, though, was introduced in 2012. CRISPR (clustered regularly interspaced short palindromic repeats) was discovered through research into how certain bacteria defended themselves against viruses. The bacteria used an enzyme known as Cas9 (CRISPR-associated protein-9) to alter the DNA of attacking viruses. Researchers found a way to use CAS9 to target specific sections of DNA in any living organism.

CRISPR-Cas9 proved to be a better and faster technique than its predecessors. It's also a lot cheaper. As a result, gene editing became accessible to a large number of researchers around the world.  

DNA strands on blue background

Image source: Getty Images.

Why is it such a big deal?

Gene editing, particularly with the advent of CRISPR-Cas9, has caused an upheaval in the biological world. Scientists are using editing the DNA of crops like wheat and rice to make them more resistant to disease and increase yields. They're modifying the genetic code of oranges to make them sweeter and vitamin-enriched.

Researchers are using CRISPR-Cas9 to improve microbial production strains. This in turn could possibly lead to new biologically produced materials for fragrances and industrial cleaning.

Some are looking at possibilities such as engineering cattle without horns and disease-resistant goats. Others are researching how to edit the genes of mosquitoes so they can't carry diseases. One start-up company recently used gene editing to eliminate viruses in pigs that are harmful to humans. This could lead eventually to pig organs that are safer for use in transplanting to humans.

Then there's the potential for gene editing in humans. Many diseases are caused by genetic mutations. Researchers hope to use gene editing to correct those gene mutations and cure these diseases. That's easier said than done, though. Still, the possibility that some genetic diseases could be wiped out over the next few decades is exciting.

With all of the hopes generated by gene editing, however, there are also fears. Genetically modified organisms already generate a lot of controversy. With CRISPR-Cas9, the potential for genetically engineering human babies has entered the realm of possibility. For the first time ever, the capability exists to even change what it means to be human. 

Six test tubes, five with blue liquid and one containing money

Image source: Getty Images.

What are the investment opportunities?

Of course, every technology -- from automobiles to nuclear power to artificial intelligence -- has the potential for achieving both positive and negative outcomes. Gene editing is no exception. The great news is that there are also tremendous opportunities for investors.

Three publicly traded biotechs have licenses to far-reaching CRISPR-Cas9 patents: CRISPR Therapeutics (NASDAQ:CRSP), Editas Medicine (NASDAQ:EDIT), and Intellia Therapeutics (NASDAQ:NTLA). Editas licenses patents claimed by the Broad Institute for use of CRISPR-Cas9 in humans. CRISPR Therapeutics and Intellia license patents claimed by the University of California (UC) for use of CRISPR-CAS9 in all cells.

The Broad Institute scored a big win earlier this year with a decision by the U.S. Patent and Trademark Office to allow it to allow both sides to lay claim to their respective patents. UC has appealed the decision in hopes that its wider-scope patent will invalidate the Broad Institute's patent. Even if UC loses its appeal, though, it's entirely possible that a company using CRISPR to edit human genes would have to license both the Broad patent and UC's patent.

There's also French biotech Cellectis (NASDAQ:CLLS), which focuses on the TALEN gene editing approach. Sangamo Therapeutics (NASDAQ:SGMO) uses the old ZFN technique. However, Sangamo has the most advanced pipeline of any of the biotechs focused on gene editing. 

Which of these biotechs will be the biggest winner? It's impossible to know at this point. One way for investors to hedge their bets is by buying shares of each one of these stocks. All of them could achieve significant success. And all of them are potential acquisition candidates for larger biopharmaceutical companies as well. There could also be other companies that benefit from even more effective methods of editing genes.

While there are uncertainties remaining, you can count on two things. Gene editing will make some investors rich. And it will make the world of tomorrow a much different place from that of today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.