What happened

Shares of the three leading CRISPR gene-editing stocks dropped between 20% and 41% last month according to data provided by S&P Global Market Intelligence. Nearly the entire stock market took a breather in October, which helped to adjust its historically expensive valuation -- well, a tiny bit anyway. Considering pre-commercial biopharma stocks, especially CRISPR stocks, have been in high demand for much of the year, they were prime candidates for coughing up market value.

Here's how CRISPR Therapeutics (CRSP -3.12%), Intellia Therapeutics (NTLA -2.32%), and Editas Medicine (EDIT -1.67%) fared last month and since the beginning of the year.


October 2018 Performance

Year-to-Date 2018 Performance

CRISPR Therapeutics



Intellia Therapeutics



Editas Medicine



Source: S&P Global Market Intelligence.

The news wires were quiet for Editas Medicine, but provided noteworthy updates for CRISPR Therapeutics and Intellia Therapeutics. There was even a new study suggesting that CRISPR gene-editing may face an uphill climb in the clinic, which could affect the fortunes of all three publicly traded companies in the space.

So what

Editas Medicine reported two additions to its scientific leadership who previously held positions developing and commercializing drug candidates at bluebirdbio and Genzyme, respectively. That was the only company-specific update for investors, although the business will report an operational update for the third quarter of 2018 in the first week of November.

CRISPR Therapeutics announced that the U.S. Food and Drug Administration lifted a clinical hold on its lead drug candidate, CTX001, which is being developed with Vertex Pharmaceuticals. The pipeline asset can now initiate clinical trials in the United States by the end of 2018 for the blood disorder sickle cell disease. The drug candidate has already begun a phase 1 trial in Europe investigating its potential to treat the blood disorder beta thalassemia.

Intellia Therapeutics presented more early stage data on one of its programs last month, but the important update came on Halloween. The company reported third-quarter 2018 operating results, and spooked investors with two announcements. First, its head of clinical development left to join Casebia Therapeutics, a joint venture between CRISPR Therapeutics and Bayer.

A finger tracking a stock chart showing losses on a touchscreen.

Image source: Getty Images.

Second, the company announced that it will delay its entry into the clinic from 2019 to 2020. Considering Editas Medicine and CRISPR Therapeutics will each be in the clinic by the end of this year, investors are wondering if falling so far behind will hurt the business in the long run.

Counterintuitively, it's actually possible that Intellia Therapeutics is the only company playing the uncertainty of the emerging CRISPR gene-editing space correctly. Some analysts speculated that the clinical trial delay announced in October had to do with a study that was published one day prior.

The Nature Medicine paper found that 96% of individuals had natural immunity to the Cas9 enzymes commonly used to conduct CRISPR gene-editing. Since the enzymes come from bacteria, that's not too much of a surprise from an evolutionary perspective, but it implies that the drugs being developed today may have a very low chance of proving effective. While there are other enzymes in development aside from Cas9, and it may be possible to engineer enzymes specifically for human-targeted CRISPR therapeutics (or use next-generation CRISPR tools that don't rely on gene editing), it's still very early for the technology and the current approaches being studied.

Now what

Despite falling back to earth in 2018, CRISPR stocks have still performed relatively well since launching onto the pubic markets within the last two or so years. CRISPR Therapeutics has gained 161% since its initial public offering (IPO), while Editas Medicine is up 54%. Only Intellia Therapeutics has lost value, delivering a 14% drop to investors since it went public.

While CRISPR gene editing technology is widely assumed to be a game-changer, investors shouldn't overlook the fact that the hype is outpacing reality at the moment. The only certainty going forward is that volatility is likely to remain.