While the pace, scale, and reproducibility of biopharmaceutical research and development (R&D) have accelerated significantly in just the last decade, investors shouldn't be too quick to dismiss the difficulties inherent in corralling biology when it comes to CRISPR gene editing. Investors shouldn't dismiss history, either.

Consider that the first successful use of gene therapy in humans took place in 1989, but the first gene-therapy treatment didn't earn marketing approval from the U.S. Food and Drug Administration until the final days of 2017. Or that RNA interference (RNAi) won the Nobel Prize in Medicine in 2006 (for work published in 1998), but the first RNAi drug didn't win approval from the FDA until 2018.

CRISPR wasn't used for gene editing until 2013, so investors ought to ask themselves: How much of the hype surrounding CRISPR is warranted? Has its potential been oversold? Honest answers to these questions might be a little unsettling to shareholders in the companies looking to capitalize on it. Luckily, even if the latest genetic medicine approach falters in clinical trials, there any other applications where it could prove successful.

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Ex vivo vs. in vivo

When most investors think of CRISPR, they likely think of the trio of companies developing candidate therapies based on the enzymatic gene-editing tool: Crispr Therapeutics (NASDAQ:CRSP), Editas Medicine (NASDAQ:EDIT), and Intellia Therapeutics (NASDAQ:NTLA). Their mutual goal is to engineer therapeutic cocktails that can fix "simple" disease-causing genetic errors -- in other words, diseases caused by single base-pair mutations, such as the blood disorder beta thalassemia, not conditions with more complex genetic roots, such as heart disease. 

But their approaches vary. For example, consider the lead drug candidates for Crispr Therapeutics and Editas Medicine. The former is developing CTX001 to treat beta thalassemia and sickle cell disease, while the latter is developing EDIT-101 to treat a rare eye disease known as LCA10. CTX001 is administered ex vivo, meaning the gene-editing tool isn't applied until cells are extracted from the patient, while EDIT-101 is administered in vivo, meaning the gene-editing tool is injected into the patient. 

That's a subtle difference, but one of crucial significance for investors. Clinicians will have more control over ex vivo editing than in vivo editing, and can better manage side effects with the former. However, aside from blood disorders, there aren't many diseases that are great candidates for ex vivo editing. When Crispr Therapeutics and Editas Medicine take aim at lysosomal storage diseases or cystic fibrosis, they'll have to administer the therapeutic payloads directly into patients or the targeted tissues.

That's riskier than it sounds, and may prove woefully ineffective until science gets a better handle on targeted delivery (and accuracy) with gene-editing tools. Given that, there could be a string of clinical failures after Crispr Therapeutics' and Editas Medicine's lead drug candidates graduate (or get expelled) from their pipelines. But CRISPR gene editing could still change medicine.

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Drug discovery and CAR-T

Ex vivo applications of CRISPR gene editing are becoming invaluable for pharmaceutical and biopharmaceutical companies, but a little more indirectly than investors might expect. The tool is proliferating in two areas in particular: drug discovery and immunotherapy design.

For instance, in mid-June, GlaxoSmithKline (NYSE:GSK) announced a commitment to invest $67 million over the next five years to build a high-throughput drug-screening lab in San Francisco powered by lab robots, machine learning, and CRISPR gene editing. 

The idea is that the gene editing approach can be used to meticulously pore over genomes from well-understood cell lines by creating small changes in the DNA, silencing or upregulating certain genes, and seeing how the engineered cells behave in controlled conditions. The observations could provide insights into how cells communicate and regulate immune responses, which could point researchers toward new drug targets much faster than existing methods. 

It's not a new idea. In fact, academia has been using gene editing to screen for drug candidates for years, such as when the University of Sydney used CRISPR to develop an antidote to box jellyfish venom (which can send a human into cardiac arrest in minutes). Rather, the novelty of GlaxoSmithKline's announcement lay in its scale, although that's likely to be replicated by other pharmaceutical companies looking for an edge with their drug discovery platforms. 

Drug discovery might prove to be a slippery investment thesis for individual investors interested in owning stocks with exposure to CRISPR gene editing, especially considering the three pioneering companies in the space won't benefit from that application. That said, all three have added immunotherapy projects and partnerships to their drug pipelines. Turns out, gene editing appears to be a simple solution to a complex problem.

Today, the T cells comprising CAR-T drug candidates have to be carefully matched from donor to patient, which creates a huge bottleneck for sourcing, manufacturing, and administering immunotherapies. CRISPR gene editing can be used to make T cells allogeneic, meaning a single donor (or cell line) can become the universal supply of cells. That could increase access, significantly limit adverse side effects, and increase the number of doses that can be administered, perhaps leading to more durable responses from treatments. Why stop there? Crispr Therapeutics aims to create off-the-shelf T cell-based immunotherapies that are also engineered to better detect and target cancer cells. CRISPR gene editing doesn't guarantee that immunotherapies will prove safe or effective, but it can be used to lower the odds of clinical failures.

But there's a catch

While drug discovery and engineered immune cells could prove to be important early applications for CRISPR gene editing, the opportunities are diluted by the fact that other gene-editing approaches work just as well in these ex vivo applications. For instance, Precision BioSciences (NASDAQ:DTIL) has developed its own gene-editing platform. The company aimed it directly at the opportunity in immunotherapy design for its first foray into the clinic -- and it's actually ahead of Crispr Therapeutics and Editas Medicine on that front. It's also just one of a half dozen or so gene-editing technologies being developed to compete with CRISPR.

Put another way, drug discovery and immunotherapy engineering represent large market opportunities, but there's nothing inherently unique about CRISPR gene editing to suggest it will capture the entire bounty of either application. There are also other types of immunotherapies that don't use T cells and are inherently allogeneic, wiping away much of the value-add of gene editing for those cell-based medicines. Couple all of that with the high risk of failure likely to accompany CRISPR-based drug candidates in early clinical trials and investors will want to remain grounded when evaluating the near-term future of the technology and the companies wielding it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.