Over the past few years, Cathie Wood's ARK Invest group of exchange-traded funds have delivered impressive gains. ARK Invest's most successful fund over the past year, the ARK Genomic Revolution ETF (NYSEMKT:ARKG) has the best performer of the bunch with an incredible 80% gain over the past 12 months.

On Jun. 3, 2021, the ARK Genomic Revolution ETF bought shares of these two clinical-stage biotechs. Should you put them in your own portfolio?

Company (Symbol) Shares Bought Shares Held Weight 
Repare Therapeutics (NASDAQ:RPTX) 13,463 1.8 million 0.72%
Dicerna Pharmaceuticals (NASDAQ:DRNA) 3,406 315,023 0.12%

Data source: ARK Funds.

ARK Invest funds have performed extremely well, but past performance is no guarantee of future returns. Before you blindly follow Wood into this pair of risky biotech stocks, take a look at what attracted ARK's attention.

Two women sit at a table with a laptop on it, going over financial statements.

Image source: Getty Images.

1. Repare Therapeutics

This company's taking a whole new approach to discovering new cancer drugs by looking for synthetic lethalities. These are gene mutations that are innocuous on their own but lethal when they occur simultaneously. In theory, Repare's treatments should cause cancer cells that carry a specific mutation to shrivel up and die without any effect on healthy cells.

A decade ago, screening millions of potential combinations of mutated proteins for lethal pairs, or synthetic lethalities would require an army of well-paid laboratory technicians and a heady combination of time and luck. Repare Therapeutics is pioneering an approach that uncovers synthetic lethalities with a combination of new techniques that include CRISPR-enabled gene editing, machine learning, and laboratory automation. 

Repare Therapeutics' unique discovery engine allows the company to develop cancer treatments with targets that no other company has even thought about aiming for yet. In April, Repare Therapeutics began a phase 1 trial with RP-6306, an oral PKMYT1 inhibitor that should be innocuous to any cell in the body that doesn't have a corresponding mutation.

Repare is also running a proof-of-concept trial with cancer patients who will receive an experimental ATR inhibitor called RP-3500 as a solo therapy and in combination with Talzenna from Pfizer (NYSE:PFE). Talzenna's a drug that makes it hard for tumor cells to repair their own DNA. We should know if there's a future for RP-3500 before the end of the year. Repare Therapeutics expects to report initial results in the second half.  

Scientist reading a report in a laboratory.

Image source: Getty Images.

2. Dicerna Pharmaceuticals

This company is developing RNA-based treatments that interfere with the production of troublesome proteins. It took a couple of decades for Alnylam (NASDAQ:ALNY) to refine this approach to drug development, but it's working out well for the current leader in the RNA interference space. Now that Dicerna Pharmaceuticals has a drug candidate in late-stage testing investors are hoping this smaller RNA interference player can produce Alnylam-sized gains.

Dicerna Pharmaceuticals' lead candidate, nedosiran is a potential treatment for primary hyperoxaluria, a rare genetic disorder that can lead to excess production of oxalate and in turn, kidney stones. The FDA approved Oxlumo from Alnylam last year to treat the most common and severe form of the disease, primary hyperoxaluria type 1 (PH1) after it reduced 52% of patients' oxalate levels to normal in a pivotal study. 

Dicerna Pharmaceuticals is developing nedosiran to address PH1 and less severe types of primary hyperoxaluria that Oxlumo isn't approved to treat yet, PH2 and PH3. A phase 2 trial with PH1 and PH2 patients should wrap up before the end of June, and a separate trial with PH3 patients is also under way. Topline results that exceed expectations could send Dicerna stock soaring, but nedosiran isn't the only iron this company has in the fire right now.

In March, one of Dicerna's big collaboration partners, Roche (OTC:RHHBY) began a mid-stage study with an experimental treatment for hepatitis B virus (HPV) from Dicerna called RG6346. More recently, the FDA greenlighted a clinical trial program run by another big collaboration partner, Eli Lilly (NYSE:LLY). The potential new cardiometabolic disease treatment, called LY3819649, is the second RNAi candidate Lilly and Dicerna have advanced into clinical-stage testing.

Follow the leader? 

Neither one of these biotechs have a reliable revenue stream yet and it's going to be at least another year before either can tell you when it could have an approved product to sell. Biotech stocks in such a precarious position can collapse overnight if investors detect a whiff of failure in the air.

The combined value of Dicerna Pharmaceuticals shares and Repare Therapeutics shares in the ARK Genomic Revolution fund works out to less than 1% of its total value. These are good stocks to buy and hold for the long run, but take a lesson from Wood and limit your exposure.

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.