Better Buy: Editas Medicine vs. Intellia Therapeutics

Which stock wins in a matchup between two leading gene-editing biotechs?

Keith Speights
Keith Speights
Feb 24, 2019 at 10:16AM
Health Care

CRISPR gene editing has been hailed as the biggest biotech discovery of the century. The technology holds the potential for dramatically changing how genetic diseases are treated. And there are only a handful of publicly traded biotechs that focus on the promising gene-editing approach.

Two of those biotechs are Editas Medicine (NASDAQ:EDIT) and Intellia Therapeutics (NASDAQ:NTLA). Both stocks have performed dismally over the past 12 months. But the past isn't necessarily indicative of the future. Which of these stocks is the better pick for long-term investors?

Dart going through DNA helix to hit a dartboard

Image source: Getty Images.

The case for Editas Medicine

Editas Medicine's lead CRISPR gene-editing candidate, EDIT-101, targets Leber congenital amaurosis type 10 (LCA10), the leading cause of inherited childhood blindness. The biotech expects to soon begin a phase 1/2 clinical study of EDIT-101, the first in vivo (i.e., in the body) clinical trial in humans for a CRISPR gene-editing therapy ever. Patient screening is planned to start up in mid-2019 with dosing of patients in the second half of the year. 

LCA10 is caused by a mutation in the CEP290 gene. EDIT-101 demonstrated rapid editing in mice carrying human genes with this mutation and in non-human primates in preclinical studies. Editas thinks its approach with EDIT-101 in LCA10 also should work well in other genetic eye diseases, particularly Usher syndrome type 2a.  

Editas isn't the only drugmaker that likes the potential for EDIT-101. Allergan teamed up with the biotech on its CRISPR gene-editing programs targeting eye diseases in 2017. Last year, Allergan exercised its option to develop and commercialize EDIT-101 in the LCA10 indication. 

Genetic eye diseases aren't the only area of focus for Editas. The biotech's management expressed enthusiasm at the J.P. Morgan Healthcare Conference in January over the prospects for its approach to hematopoietic stem cell (HSC) gene editing. Editas Chief Scientific Officer Charlie Albright said the company is close to selecting a candidate to advance to clinical studies targeting the treatment of rare blood disorders sickle cell disease and beta-thalassemia using its HSC gene-editing approach.

The company is also collaborating with Celgene on using CRISPR gene editing to engineer immune cells for treating solid and liquid tumors. Editas hasn't yet announced when any of these programs might move to clinical testing, though.

One nice plus for Editas is its strong intellectual portfolio. The biotech licensed exclusive rights to key CRISPR patents from the Broad Institute. It licensed additional patents for the CRISPR/Cpf1 gene-editing approach developed by one of the company's co-founders, Feng Zhang. Overall, Editas has more than 70 issued patients in addition to around 600 patent applications pending approval. 

The case for Intellia Therapeutics

Intellia Therapeutics' lead pipeline candidate is a CRISPR gene-editing therapy for treating rare genetic disease transthyretin amyloidosis. The biotech is currently conducting preclinical testing that it thinks will lead to filing an application in 2020 to begin a phase 1 clinical study in humans.

Like Editas, Intellia has attracted the attention of a large drugmaker with its lead gene-editing candidate. Regeneron and Intellia began working together in 2016. Under the terms of their six-year agreement, Regeneron can license Intellia's therapies for up to 10 targets focusing primarily on liver diseases and up to five non-liver targets. 

Another big partner, Novartis, teamed with Intellia in 2015 to develop CRISPR gene-editing therapies using chimeric antigen receptor T-cells and HSCs. Last December, the two companies expanded their collaboration in a deal where Novartis gained the right to develop gene-editing therapies using certain ocular stem cells. In return, Intellia received a one-time $10 million payment and expanded rights to Novartis' lipid nanoparticle technology. 

Intellia also has a handful of other gene-editing programs that it hopes to advance to clinical studies in the not-too-distant future. The biotech has already demonstrated early promise for its CRISPR therapy targeting acute myeloid leukemia (AML). Intellia hopes to nominate its first engineered cell therapy for AML by the end of 2019.  


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Potential issues

There are a few noteworthy issues for Editas Medicine and Intellia Therapeutics. One issue that affects both biotechs is the very early status of CRISPR gene-editing development. Several potential problems have been identified with CRISPR. It's possible that more issues could be discovered.

Editas faces the challenge of replacing both its CEO and CFO. In December, the biotech announced that then-CFO Andrew Hack was leaving to return to the investment industry. A month later, Editas announced that Katrine Bosley, the company's CEO for five years, was leaving. These high-level departures caught investors by surprise.

Intellia could have an issue with its patent rights. The biotech licensed CRISPR patents from Caribou Biosciences in 2014, which gave it a sublicense to patent rights of the Regents of the University of California and the University of Vienna. But it's a complicated arrangement that could be ripe for challenges by one or more parties.

Better buy

Both Editas and Intellia are very early-stage, high-risk stocks. Only aggressive investors should consider either of these stocks.

Between the two, though, I think that Editas is the better pick. It's ahead of Intellia in advancing to clinical testing and its intellectual property protection seems to be more secure. Despite its rocky road over the past several months, I think Editas could be a winner over the long run.

Check out the latest Editas earnings call transcript.