Despite technological advances, most of medicine is still stubbornly one size fits all.

The Cleveland Clinic passed a significant milestone June 27. The Ohio-based medical research facility became the first to show the efficacy of using deep learning to set cancer patient dosage levels.

It's part of a larger movement called precision medicine, based on the idea that a patient's genes, environment and lifestyle offer a valuable roadmap to treating diseases.

The technology is here. Investors should get ready.

Customizing medicine is logical. Doctors should be able to use technology to deliver the right treatment to the right person at the right time. In practice, unfortunately, that's not always how it works.

Most patients diagnosed with cancer, for example, undergo a battery of oncology tests. They usually end up with surgery, chemotherapy or some combination. But chemotherapy is the carpet bomb of medical treatments. It destroys everything, killing good and bad cells indiscriminately.

Precision medicine is more of a smart bomb. Doctors locate the problem at the cellular level, find the right drug, calibrate the dosage based on what they know about the patient's genetics, then hit the abnormal cells.

The Cleveland Clinic study involved 944 patients receiving radiation treatment for lung cancer. To create a tumor image signature, their pre-treatment CT scans and data from their digital health records were fed into a sophisticated deep learning model. Researchers then used the signature and artificial intelligence to determine custom radiation dosage schedules.

The ground-breaking achievement is purely digital and software-based. This means it should be able to easily scale across a wide range of clinical settings. At this stage in the development of precision medicine, that is a worthy first goal.

The National Institutes of Health, a partner is the Cleveland study, is helping to build a 1 million volunteer sample group 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 speed up the drug approval process. And a consortium of privacy groups is being consulted to ensure patient record records are safeguarded.

Pharmaceutical companies are gearing up, too.

Roche promised in 2015, up to $1 billion to Blueprint Medicines for five small molecule projects in development. Then, in January 2016, the company upped the ante with a $1 billion investment in Foundation Medicine, a molecular and genomic diagnostic company.

TheStreet Recommends

Illumina (ILMN) - Get Illumina, Inc. (ILMN) Report , a provider of diagnostic equipment and services, formed similar alliances with Germany's Merck KGaA, AstraZeneca and Sanofi.

In fairness, Illumina executives have a self-interest. Not only does the San Diego company make the best hardware for genetic sequencing, but it has also become the software platform of choice among researchers.

The company spent $100 million in May 2018, to acquire Edico Genome, another San Diego firm, that makes gear to speed up the processing of bio information. Later in October, Illumina announced it was adding another five startup companies to its accelerator program. They will get access to labs, office space, expertise counsel and seed capital during six-month cycles.

The corporate objective is to advance science and accelerate the market for DNA sequencing solutions.

The science is relatively new. The first human genome was sequenced only 15 years ago at a cost of $2.7 billion. Today, Illumina can sequence individual genomes for about $1,000, although corporate managers are on record saying the objective is to push the price closer to $100.

Despite falling prices, Allied Research, an independent boutique research firm, predicts the market for such testing will grow to $18.2 billion by 2023, representing a compound annual growth rate of 19.6%.

Illumina had 70% of the market for DNA sequencing in 2014, according to a report from MIT Technology Review. Since then, the company has been on a buying spree, consolidating the sector through mergers and acquisitions.

Shares trade at 48x forward earnings and 16x sales. The market capitalization is $54.5 billion. The company is no longer small but the valuation is not extreme given the potential total addressable market.

Sales surged 21% in 2018, the fastest pace of growth since 2014.

Long-term investors can consider buying the stock into weakness. The precision medicine story that is driving the share price is only getting started.

Save 57% with our July 4th Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor! Click here to sign up!


The author of this column does not own any stocks mentioned.