Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Editas Medicine Jumped 23% in November

By Maxx Chatsko – Dec 10, 2018 at 12:42PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The gene-editing pioneer reported third-quarter 2018 earnings and reported FDA acceptance of its first investigational new drug (IND) application.

What happened

Shares of Editas Medicine (EDIT -1.21%) soared 23% last month, according to data provided by S&P Global Market Intelligence. The CRISPR pioneer announced third-quarter 2018 operating results highlighted by a cash balance of $337 million at the end of September. It also announced that the U.S. Food and Drug Administration had accepted the investigational new drug (IND) application for EDIT-101 in Leber congenital amaurosis type 10 (LCA10), a type of eye disease. 

The acceptance of the IND will allow the company's lead drug candidate to begin a phase 1/2 trial evaluating its safety in 10 to 20 patients. It also triggered a $25 million milestone payment from Allergan, which is splitting development and commercialization responsibilities for EDIT-101 with Editas Medicine. This could be the start of an industry-leading pipeline if the approach proves successful.

A woman checking her phone and pumping her fist in excitement as cash money falls around her.

Image source: Getty Images.

So what

Editas Medicine is now the second gene-editing company to earn FDA acceptance for an IND covering a CRISPR-based drug candidate. Peer Crispr Therapeutics has received the green light for two early-stage trials evaluating CTX001 in two rare blood diseases, sickle cell disease and beta-thalassemia. While there isn't any overlap between the lead drug candidates of the two companies, Editas Medicine does hope to develop a therapy in the future for treating or curing the same blood diseases -- just with a different approach.

EDIT-101 could pave the way. That's because it will become the first CRISPR-based therapy to be tested in vivo, meaning the medicine is intended to work directly in a patient's body. CRISPR Therapeutics is taking the ex vivo approach with CTX001, which requires removing cells from a patient, engineering them in a controlled setting, then injecting the engineered cells back into the patient. The difference comes down to the cell type being engineered and the capabilities of current-generation gene-editing tools, but in vivo therapeutics could result in lower-cost medicines, on paper at least.

When Editas Medicine introduces its drug candidate for sickle cell disease and beta-thalassemia into the clinic, it will also work in vivo. Could that provide it an edge over CTX001? Maybe, but it's much too early to tell right now.

Now what

Similar to those of its peers, shares of Editas Medicine have taken investors on a wild ride in 2018. The stock has posted gains of 55% since making its debut years ago, but are down about 8% since the beginning of the year. That has more to do with investors getting ahead of themselves than any mistakes made by the business. Either way, there's a long road ahead for CRISPR-based therapies, which could take years to hit the market -- if they successfully clear clinical trials at all.

Maxx Chatsko has no position in any of the stocks mentioned. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool recommends Editas Medicine. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.