What happened
A promising start to the year for the three pioneering CRISPR human gene-editing companies was wiped out in May. Shares of Editas Medicine (EDIT +2.64%) led the pack downward with a 17% decline, Crispr Therapeutics (CRSP +4.66%) tumbled by 11.5%, and Intellia Therapeutics (NTLA +2.77%) fell 9.8%, according to data from S&P Global Market Intelligence. Those moves left CRISPR Therapeutics as the only member of the trio outperforming the S&P 500 in 2019.
The obvious culprit behind last month's sour performances: first-quarter earnings results and business updates. But it's worth noting: CRISPR is no longer the only game in town for investors interested in gene-editing stocks. Precision BioSciences (DTIL +2.81%) thinks homing endonucleases are safer and more accurate genome-engineering tools than CRISPR enzymes, debuting in March with $170 million in net proceeds.
Image source: Getty Images.
So what
The steep declines among CRISPR stocks actually started during the last two days of April following the Q1 update from CRISPR Therapeutics, which set the tone for the niche and induced double-digit percentage drops for shares of both Editas Medicine and Intellia Therapeutics as well. Analysts are increasingly eyeing the impending matchup in blood disorders between CRISPR Therapeutics and Editas Medicine, while each of the three is taking a slightly different approach from the others to engineering immune cells to treat various cancers.
In other words, these pioneers are likely to cross paths competitively for the first time in the near future. Consider that CRISPR Therapeutics is already enrolling patients in two phase 1/2 clinical trials evaluating CTX001 as a treatment for beta thalassemia and sickle cell disease. While it was the first CRISPR company to enter clinical trials, Editas Medicine is collecting data for its "potentially best-in-class" treatments for the same blood disorders. Its first clinical trial for a rare eye disease is on pace to enroll patients in the second half of 2019.
Intellia Therapeutics doesn't expect to even file its first investigational new drug application until 2020, but it has quietly been developing a delivery technology and suite of T cell engineering tools. That promises to put it in direct competition with its peers, each of which is developing a unique approach to engineering "off-the-shelf" cell lines for cancer immunotherapies.
Aside from those looming collision courses, there weren't any glaring surprises in the recent quarterly reports, and each business remains flush with cash.
|
Metric |
CRISPR Therapeutics |
Editas Medicine |
Intellia Therapeutics |
|---|---|---|---|
|
Market cap |
$1.97 billion |
$1.02 billion |
$657 million |
|
Cash balance (end of Q1) |
$437.5 million |
$342 million |
$297 million |
|
First clinical target |
Beta thalassemia and sickle cell disease (blood) |
LCA-10 (eye) |
Transthyretin amyloidosis (rare disease) |
|
First clinical trial start date |
February 2019 |
H2 2019 |
2020 or 2021 |
|
Immunotherapy engineering tools |
Wholly owned allogeneic CAR-T |
Partnership with BlueRock Therapeutics to create allogeneic cells |
Engineered T cell receptors (TCR) |
Data source: Press releases.
The jockeying among CRISPR developers -- each with its complex intellectual property licenses -- could give alternative gene-editing approaches a leg up among investors. Precision BioSciences plans to apply its unique approach widely in engineering immune cells and correcting defective mutations in vivo, and could also earn licensing royalties from agricultural or industrial companies eager to precisely engineer crops and microbial factories. The trio won't enjoy the same revenue diversity because they don't own the rights to use CRISPR outside applications in medicine.
Now what
The market is clearly putting these three CRISPR pioneers in distinct lanes. CRISPR Therapeutics has been rewarded with a higher share price for its relatively drama-free execution of its strategy. Editas Medicine has been dinged for management shakeups, while Intellia Therapeutics is an afterthought because of its development timeline. However, investors shouldn't think the race has been settled. Right now, companies swiftly entering clinical trials are attracting value, but if therapeutic delivery vehicles don't work successfully, then the slow-and-steady pace of Intellia Therapeutics could prove to be an advantage to it down the road. Or, another approach, such as that of Precision BioSciences -- or gene editing platforms that are still in being explored in academia -- could dethrone CRISPR gene editing altogether.
