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Should Sangamo's Failure Make CRISPR Investors Nervous?

By Cory Renauer – Updated Apr 19, 2019 at 10:54AM

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The latest gene therapy to flop in a clinical trial pulled CRISPR stocks down with it.

The first look at a revolutionary new gene therapy from Sangamo Therapeutics (SGMO -2.35%) recently caused the stock to crash. Editas Medicine (EDIT 0.54%) and Crispr Therapeutics (CRSP 0.67%) are running their first studies with a different gene-editing technology, but their stock prices took a beating as well. 

Did the market overreact to an unrelated problem, or does Sangamo's flop truly suggest trouble ahead for CRISPR stocks? As you may have guessed, the answer isn't that simple.

A nervous doctor.

Image source: Getty Images.

Reasons to relax

Sangamo Therapeutics, Editas Medicine, and Crispr Therapeutics are all trying to help patients produce proteins that they can't make on their own, but Sangamo's the only one using zinc-finger nucleases to get the job done. Investors holding CRISPR stocks should know that this gene-editing tool has been around a long time, without much to show for it.

Sangamo's been working with zinc finger nucleases for decades, and the company still hasn't been able to advance a gene therapy through late-stage clinical trials. The latest results for SB-913 suggest this candidate isn't going very far, either.

Patients with Hunter syndrome lack a digestive enzyme called iduronate-2-sulfatase (IDS), and SB-913 aims to fix the problem by delivering a working copy of the IDS gene to liver cells. In September, Sangamo stock tanked after investigators couldn't find any sign of IDS production from the first pair of patients to receive a starting dose of SB-913. Among six patients treated so far, just one from the highest-dosage group showed a meaningful gain in IDS activity, which didn't last long after the patient exhibited signs of liver damage.

Editas Medicine's first candidate to begin clinical trials, EDIT-101, will be injected directly into eyeballs, a low-circulation environment without much immune system activity. Sangamo's SB-913 acts in the liver, which could be a zone that's just too hot for a treatment that essentially infects patients with a weakened virus to get its zinc fingers into their liver cells. 

Crispr Therapeutics' first candidate, CTX001, is taking a different route by editing patients' own stem cells off-site before shipping them back to be reinfused. Getting those cells through a needle and back into a patient's bone marrow is a challenge on its own, but at least we've seen this approach work for other autologous cell therapies. 

Three scientists in a lab.

Image source: Getty Images.

A reason to remain defensive

Technically, SB-913 worked as intended, and that should make CRISPR investors at least a little bit nervous. Investigators have conducted liver biopsies for one patient given the starting dose and two patients treated with twice the starting dose. Using a highly sensitive test, the company found evidence that SB-913 successfully inserted at least some IDS genes to all three patients.

This was a frightening reminder of just how little we know about regulating gene expression. It turns out that inserting a functional gene in the right place isn't the largest hurdle in front of gene-editing stocks that use CRISPR or any other method. The hard part is getting cells to do something with those genes once they've been inserted. That's why Crispr Therapeutics and Editas are developing their first new drug candidates for patients with inherited blood and eye disorders.

How to improve the odds

There's really no telling whether a gene promoter that worked in animal studies will also work for humans, but Editas and Crispr Therapeutics aren't using one in the first place. The first clinical-stage candidates from both deliver an editing mechanism that snips out a portion of DNA instead of inserting a new gene.

Editas is also taking advantage of the inner eye's relative lack of circulation. With relatively little immune system activity to harass EDIT-101, the experimental therapy has a better chance to get the job done than therapies meant to work in the liver.

Crispr Therapeutics is taking a much different approach that involves removing stem cells before editing them to increase the expression of fetal hemoglobin. Rather than inserting anything, CTX001 disables a gene responsible for halting the production of fetal hemoglobin after birth.

A big red question mark on top of hundred dollar bills.

Image source: Getty Images.

Clinical trials are only the beginning

The first candidates from Editas Medicine and Crispr Therapeutics probably have a much better chance of clinical trial success than SB-913, but that doesn't mean they'll succeed in the commercial setting.

We've already seen bluebird bio (BLUE 1.84%) produce impressive results with a gene therapy candidate of its own. LentiGlobin inserts a functional hemoglobin gene into stem cells, and it could earn approval next year to treat the same patients that Crispr Therapeutics wants to help with CTX001. 

Editas will have a lot less potential competition to worry about with EDIT-101, but just a few thousand people are born with the disorder each year.

Sangamo's latest setback really didn't tell us anything we didn't already know, but that doesn't mean CRISPR investors shouldn't be nervous about their first clinical trial readouts. 

Check out the latest earnings call transcripts for companies we cover.  

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bluebird Bio and Editas Medicine. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool has a disclosure policy.

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