Gene editing holds tremendous promise to help patients and potentially cure a multitude of inherited diseases. Editas Medicine (NASDAQ:EDIT) and Sangamo Therapeutics (NASDAQ:SGMO) employ technologies aimed at removing, replacing, or editing sections of the human genome.

Editas focuses on a relatively recent technology called CRISPR while Sangamo uses several technologies including what is called zinc finger technology. Both approaches allow for precise gene editing by breaking the DNA strand and either inserting new DNA sequences or deleting sections of damaged or mutated DNA.

Hand with scissors snipping piece of DNA strand.

Image source: Getty Images.

CRISPR has quickly been adopted as a research tool in labs across the globe. However, translating a powerful tool in the lab into a viable medicine remains an uphill challenge. RNAi, a gene-silencing technology, took close to 16 years before Alnylam received the first approval of an RNAi therapy last year. Editas faces competition in this field from CRISPR Therapeutics and Intellia Therapeutics, not to mention companies such as Sangamo, developing different technologies seeking to achieve the same outcome. So which of these two promising biotechs is the better buy today?

Early data suggests therapeutic benefit

None of Editas' programs have advanced to human trials. However, Editas plans to start enrollment in 2020 for its first clinical trial with EDIT-301, a potential treatment for sickle cell disease and beta thalassemia. Positive efficacy and safety results of EDIT-301 were presented at the 24th Congress of European Hematology Association in June.

Sangamo proponents tout encouraging, yet early, data of SB-525, a gene therapy for hemophilia A, a genetic disease that causes increased bleeding. Initial results in April revealed that a small cohort of patients receiving the treatment achieved normal Factor VIII levels after six weeks of treatment. Factor VIII is essential for normal blood clotting. Updated data in the summer demonstrated that patients maintained the normal Factor VIII levels. 

Sangamo and Pfizer, its partner for SB-525, need to move quickly. BioMarin Pharmaceuticals just announced that it filed with European regulators for the approval of its competing gene therapy to treat severe hemophilia A, with the intent to complete a submission to the U.S. Food and Drug Administration before the end of this year. 

Two figures shaking hands, with code and lights all around them.

Image Source: Getty Images.

Editas and Sangamo both partnering for success

With new technologies, partnerships provide early validation, much-needed nondilutive capital, and gives research and development programs extra resources to help skew the odds for success.

Editas entered an exclusive collaboration in 2015 with Juno Therapeutics focused on three cancer immunotherapy programs. The companies sought to combine Editas' gene-editing platform with Juno's chimeric antigen receptors (CAR T) and T cell receptors (TCR). Juno was subsequently bought by Celgene, which itself became part of Bristol-Myers Squibb this month. 

In 2017, Editas forged a partnership with Allergan to develop up to five treatments for various eye diseases. Allergan exercised an option to one of the programs and paid Editas $15 million. An Investigational New Drug (IND) application was submitted to the FDA at the end of 2018, triggering another $25 million payment. 

Pfizer saw promise in Sangamo early on and paid $70 million up front to partner on SB-525 and other products. Pfizer will take over responsibility for the phase 3 clinical trial, manufacturing, and commercialization. The deal includes up to $475 million in milestone payments with $300 million related to SB-525.

Pfizer CEO Albert Bourla commented on the most recent conference call that manufacturing has been transferred from Sangamo and patient enrollment is underway for the lead-in portion of the phase 3 clinical trial with SB-525.

Sangamo entered a strategic alliance with Kite Pharma, now part of Gilead, to develop engineered cell therapies. In April 2018, Kite paid Sangamo $150 million up front with an eye-popping $3.01 billion in contingent payments for achieving specific development, regulatory, and commercial milestones. 

Sanofi forged Sangamo's first major deal back in 2014. The companies embarked on a plan to develop novel therapies for beta thalassemia and sickle cell disease. Sanofi paid $20 million at the onset and will pay contingent milestones of up to $276.3 million. As of Sept. 30, Sangamo earned $6 million of the milestone payments. 

Watch for new data before year-end

Investors should keep a lookout for additional data announcements from both Editas and Sangamo during the American Society of Hematology annual meeting, which will be held Dec. 7 to 10. Editas announced its preclinical proof-of-concept data for EDIT-301 will be presented. Sangamo will provide an update of the ongoing SB-525 clinical trial, which laid the foundation for next year's phase 3 trial.

Investing in nascent technologies requires biotech investors to understand the high-stakes game ahead of them. Any, all, or none of these pioneering gene-editing treatments may succeed in the end. Both companies attracted sizable partnership deals to help expand the number of programs in development while also providing nondilutive financing for each. In the end, I choose Sangamo as the better buy today. Its lead program is advancing into phase 3 under Pfizer's lead while Editas' pipeline is just a bit too early for my liking.