What happened

The results are in. Well, for the first two patients anyway. 

Shares of the major gene editing stocks are soaring today after CRISPR Therapeutics (NASDAQ:CRSP) provided the first-ever clinical update for its lead drug candidate, CTX001, in transfusion-dependent beta thalassemia (TDT) and sickle cell disease (SCD). Results from the first patient treated for each disease suggest that the gene-editing approach successfully altered red blood cells and may in fact live up to its curative potential. 

The update pushed shares of CRISPR Therapeutics up as much as 26%, while shares of Editas Medicine (NASDAQ:EDIT) and Intellia Therapeutics (NASDAQ:NTLA) rose as much as 16.9% and 17.4%, respectively. The "rising tide lifts all boats" cliche applies here, but the daily gains for peers may be a bit generous, especially after considering the differences in approach.

As of 11:12 a.m. EST, all three CRISPR stocks backed off highs set earlier in the day but were all up at least 10%.

A businessman with his laptop on a cartoon rocket.

Image source: Getty Images.

So what

Individuals with TDT and SCD have irregularities in the hemoglobin contained within their red blood cells. But red blood cells are one of the few cell types in your body that don't contain your DNA. Therefore, doctors in the ongoing study have to extract bone marrow from a patient, genetically engineer certain stem cells responsible for red blood cell production with a CRISPR tool, and then re-inject the engineered cells back into the patient.

That part of the study appears to have worked in the first two patients. CRISPR Therapeutics reported that the individual with TDT required an average of 16.5 blood transfusions per year in the two years prior to being enrolled in the study. At nine months after being treated with CTX001, the individual was transfusion independent (compared to an expected 12 transfusions in that span prior) and had 99.8% F-cells (the number of red blood cells expressing the engineered form of hemoglobin). 

Similarly, CRISPR Therapeutics reported that the individual with SCD experienced an average of seven vaso-occlusive crises (blockages of small blood vessels caused by sickle-shaped red blood cells) per year in the two years prior to being enrolled in the study. At four months after being treated with CTX001, the individual was free of vaso-occlusive crises (compared to an expected two in that span prior) and had 94.7% F-cells.

Measuring the amount of F-cells is important because it tells researchers if the gene editing was successful and, over the two-year duration of the trial, will show whether the treatment is durable or wears off over time. Because working copies of red blood cells survive longer than faulty red blood cells, there's good reason to be optimistic that the responses will be durable.

But these results are from just two patients. And they've been followed for months, not years. Luckily, CRISPR Therapeutics is well-positioned for the long haul.

Company

Market Cap

Cash at the End of Q3 2019

CRISPR Therapeutics

$3.85 billion

$629.7 million

Editas Medicine

$1.34 billion

$295.7 million

Intellia Therapeutics

$723 million

$295.8 million

Data source: Press releases, Y!Charts.

As for Editas Medicine and Intellia Therapeutics, investors appear to be assuming that the results from CTX001 mean CRISPR gene editing tools work -- or might work -- and that's reason enough to celebrate. But there are vast differences to consider. 

CRISPR Therapeutics designed CTX001 to engineer genes ex vivo, or outside the body. The lead drug candidate from Editas Medicine engineers genes in vivo, or directly inside the body, where researchers have less control over the environment. Intellia Therapeutics has yet to enter clinical trials and is instead focusing on novel delivery methods.

Simply put, the super early results for CTX001 don't say much about the potential for success of the in vivo drug candidates being developed across the industry -- including those in preclinical programs at CRISPR Therapeutics. 

Now what

While there's a very long way to go for CTX001, the results are about as good as investors could have hoped for at this point. Two patients, two blood disorders, and two outcomes that could be considered cures if the results prove durable. That alone is great news for CRISPR Therapeutics and its development partner Vertex Pharmaceuticals. However, investors need to be careful not to extrapolate the results too far in the field of CRISPR gene editing.