Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Intellia Therapeutics Stock Lost 23.8% in December

By Maxx Chatsko - Updated Apr 16, 2019 at 11:15PM

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 was an easy target during the end-of-the-year market sell-off.

What happened

Shares of Intellia Therapeutics (NTLA 4.35%) fell nearly 24% last month and 29% in all of 2018, according to data provided by S&P Global Market Intelligence. The sour end to the year came on the heels of a broad sell-off in global stock markets and the general sentiment among investors that the gene-editing pioneer is lagging too far behind peers Crispr Therapeutics and Editas Medicine.

Crispr and Editas are both enrolling patients in the first clinical trials for CRISPR-based tools today. Intellia Therapeutics says it won't be ready to graduate from preclinical work until 2020. However, as an expanded collaboration with Novartis demonstrates, the company thinks moving slowly in the beginning will provide long-term advantages.

A sliding chart drawn on a chalkboard.

Image source: Getty Images.

So what

It didn't move the needle as far as the share price was concerned, but Intellia Therapeutics announced an expanded collaboration with Novartis in early December that landed the upstart a one-time $10 million payment. That will pad a balance sheet that sported $293 million in cash and cash equivalents at the end of the third quarter of 2018. 

More importantly, the expanded collaboration will allow Intellia Therapeutics to use Novartis' lipid nanoparticle delivery technology for all genome editing applications in its pipeline. What the heck does that mean? Well, the overhyped discussion of CRISPR gene-editing tools often focuses solely on intended outcomes: repairing or correcting faulty DNA and treating or curing disease. It's much more complicated than that.

One major obstacle that seems to get glossed over in the discussion is how the drug payloads will be delivered to the targeted human cells. There are various ways to do it, including via viruses or by packaging the engineered CRISPR system into tiny molecular soccer balls called lipid nanoparticles. There are still unknowns regarding how well each delivery system will work in human cells -- something that could come back to upset faster-moving peers in certain disease targets -- which is why Intellia Therapeutics is focusing heavily on the delivery system before readying a drug candidate for clinical trials.

Now what

Considering the hype surrounding CRISPR gene editing, investors may want to prepare for another volatile year for Intellia Therapeutics stock. Whether developments relating to the lipid nanoparticle delivery systems will be enough to excite Wall Street remains to be seen, but there may not be many updates from the preclinical company outside of announcing additional collaborations.

Check out all our earnings call transcripts.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Intellia Therapeutics Stock Quote
Intellia Therapeutics
NTLA
$54.01 (4.35%) $2.25

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

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