There's never been a better time to inherit a genetic disorder. Patients born with a handful of rare diseases have already received experimental gene therapies that essentially act like one-shot cures, and before the end of the year we'll find out if they work as hoped.
All three of these gene therapy stocks could soar if incoming clinical trial results hit the right marks. Here's what you need to know about the catalysts that could send their share prices skyward.
|Company||New Drug Candidate||Condition||Market Capitalization|
|BioMarin (NASDAQ:BMRN)||Valoctocogene roxaparvovec||Hemophilia||$17.6 billion|
|CRISPR Therapeutics (NASDAQ:CRSP)||CTX001||Sickle cell disease||$1.6 billion|
|Sarepta Therapeutics (NASDAQ:SRPT)||AAVrh74.MHCK7.micro-Dystrophin||Duchenne muscular dystrophy||$9.3 billion|
Replacing replacement therapy
Hemophilia patients need regular infusions of the blood clotting factors they can't produce themselves, or else they run the risk of a fatal bleeding event. These treatments aren't cheap, and insurers can cough up over $250,000 per year caring for patients with this incurable condition.
BioMarin is currently testing an experimental gene therapy that looks like it allows hemophilia A patients to produce clotting factor 8 on their own. Valoctocogene roxaparvovec (valrox) uses a softened virus to deliver a functional gene for factor 8, and early results from a small study suggest it works as expected. After 104 weeks, patients reduced their use of factor replacement therapy by a stunning 96% compared to the baseline.
Last year, Biomarin expanded a 40-patient pivotal study with valrox to 130 patients. The company will present data from the first group this year, and success would send the stock soaring. The FDA appears willing to grant accelerated approval based on the first patients, and then monitor the rest for perhaps a couple of years before granting full approval.
Biomarin markets a handful of rare-disease drugs that raked in $1.5 billion last year, and total sales are expected to reach $2 billion in 2020 without any help from valrox. That makes this the safest stock in this list.
Moment of truth for CRISPR Therapeutics
Since the beginning of the biotech industry, start-ups with experimental drugs have waited for human proof-of-concept results before tapping the public markets. CRISPR Therapeutics went public long before the company could tell investors when studies with people might begin, but that didn't stop investors from throwing heaps of money in its direction.
In 2019, we'll find out if the gene editing technique that CRISPR Therapeutics is built upon can become a useful tool for developing new gene therapies. An estimated 10,000 human diseases are caused by a single faulty gene, and the vast majority still have zero effective treatment options. In the months ahead, CRISPR Therapeutics will share early results from its first clinical trials, and investors will be looking for signs that there could be plenty more gene therapy candidates emerging from its pipeline in the years ahead.
Late last year, CRISPR Therapeutics began enrolling patients with sickle cell disease and beta-thalassemia into separate studies with CTX001. This experimental treatment involves using CRISPR to edit a patient's own stem cells offsite before shipping them back to be reinfused. If successful, the modified cells will engraft and produce enough fetal hemoglobin to allow patients with both diseases to stop relying on regular blood transfusions permanently.
The pair of studies will each enroll up to 45 patients, but CRISPR wants to try CTX001 on just two patients with each disease before enrolling the rest. If the first four patients produce enough fetal hemoglobin on their own to remain transfusion-free this year, the stock will probably climb.
Investors need to remember that CRISPR Therapeutics doesn't know when it will begin clinical trials with its next candidate, which means one whiff of trouble for CTX001 could lead to severe losses.
New option for muscular dystrophy?
Sarepta Therapeutics is advancing a potential cure for Duchenne muscular dystrophy (DMD), a severe muscle-wasting disease. Sarepta began marketing its first DMD treatment, Exondys 51, in 2016, and sales reached an impressive $301 million in 2018.
Exondys 51 only treats DMD patients born with a dystrophin gene that lacks exons 48 through 50, which describes just 13% of the DMD population. Sarepta has a gene therapy on the way that could help just about every DMD patient.
Sarepta's candidate, AAVrh74.MHCK7.micro-Dystrophin, is a one-time gene therapy that delivers a functional micro-dystrophin gene to muscle cells throughout the body, including cardiac muscle. It's early but so far, micro-dystrophin appears to do the trick. The first four patients dosed showed increased expression of micro-dystrophin and reduced signs of muscle wasting. Levels of creatine kinase, a general sign of muscle damage fell, while their ability to move around improved.
After meeting with the FDA in late 2018, Sarepta began a 24-patient, placebo-controlled study that's already dosed two patients. Sarepta has boasted about impressive functional results among the handful of patients that have been treated with micro-dystrophin so far. It could take years to measure all the outcomes from this study, but an interim assessment could give us some clues before the end of the year.
A risk worth taking?
As a commercial-stage company, Sarepta Therapeutics isn't nearly as risky as CRISPR, but Sarepta's a long way from safe. Although annual product sales rose 95% last year to $301 million, the company also lost a whopping $221 million during the first nine months of 2018.
Sarepta has already submitted an application for a new DMD candidate similar to Exondys 51 that will treat an estimated 8% of DMD patients. Golodirsen could earn approval by the end of the year, and micro-dystrophin might not be very far behind.
Right now, Sarepta's a $9.3 billion company that's still losing money, but probably not for much longer. Timely approvals for golodirsen and micro-dystrophin could drive the company to profitability in a few short years, which is probably worth the risk.