Has there been a lot of hype about CRISPR gene editing? Absolutely. But while the hype might have been overdone in some cases, the reality is that there's significant potential for CRISPR (which stands for "clustered regularly interspaced short palindromic repeats") to transform the way many diseases are treated.

2019 has been an important year for the top CRISPR gene-editing stocks with the first human clinical studies cranking up. CRISPR Therapeutics (NASDAQ:CRSP) has been the biggest winner -- mainly because those studies were for its lead pipeline candidate. However, Editas Medicine (NASDAQ:EDIT) and Intellia Therapeutics (NASDAQ:NTLA) have also racked up nice year-to-date gains.

But as Bachman-Turner Overdrive sang, "You ain't seen nothing yet." Here's why 2020 should be the biggest year so far for CRISPR gene-editing stocks.

DNA helix with a segment broken off

Image source: Getty Images.

Key clinical studies

CRISPR Therapeutics and its partner Vertex Pharmaceuticals (NASDAQ:VRTX) already announced encouraging preliminary results in November from the first clinical studies to date for a CRISPR gene-editing therapy. Nine months after receiving an infusion of CRISPR therapy CTX001, a patient with rare blood disease transfusion-dependent beta thalassemia no longer needed transfusions. In the other study, a patient with sickle cell disease was free of vaso-occlusive crises (VOCs) -- a painful complication of sickle cell disease -- four months after receiving an infusion of CTX001. This patient previously experienced an average of seven VOCs per year.

It's still really early and the preliminary results were only for two patients. However, the news was positive enough that Vertex CEO Jeffrey Leiden was talking about CTX001 having the potential to cure beta-thalassemia and sickle cell disease. 

2020 should bring more results that could increase the buzz about a potential cure for the two genetic diseases. The primary results from CRISPR Therapeutics' two early stage clinical trials aren't scheduled to be available until early 2021. However, the primary endpoints of both studies focus on meaningful improvement for at least three months starting six months after CTX-001 infusion. If additional patients experience the level of improvement seen in the first two patients, we'll likely hear about it next year. 

Don't be surprised if CRISPR Therapeutics provides a sneak peek at early results from its early stage clinical study of CTX110 in treating B-cell malignancies in 2020 as well. CTX110 is the biotech's first allogeneic chimeric antigen receptor T-cell (CAR-T) therapy to be tested in humans. Allogeneic CAR-T therapies could be game-changers in treating blood cancers. Current CAR-T therapies require a patient's own T-cells to be genetically modified at an off-site lab, which involves several weeks and is very expensive. Allogeneic CAR-T therapies, sometimes referred to as "off-the-shelf" therapies, use healthy donors' T-cells and can be administered quickly and should be much less costly.

So far, we've only discussed ex vivo CRISPR therapies where cells are genetically edited outside of patients' bodies then administered via infusion. A major milestone should also be achieved with the first-ever in vivo (in the body) dosing of a CRISPR gene-editing therapy likely on the way in early 2020. Editas Medicine has already screened the first potential patients with Leber congenital amaurosis type 10 (LCA 10), the leading genetic cause of blindness, that could be treated with EDIT-101, a CRISPR therapy that is administered through an injection in the eye. 

Expanding targets

In addition to the clinical studies currently in progress, look for new clinical trials that use CRISPR gene editing in other therapeutic targets next year. CRISPR Therapeutics plans to initiate an early stage clinical study in the first half of 2020 evaluating its second allogeneic CAR-T therapy, CTX120, in treating multiple myeloma.

Editas expects to provide data to its partner Allergan (NYSE:AGN) by the end of 2019 related to its next potential clinical candidate targeting Usher syndrome type 2a (USH2A), which, like LCA 10, is a rare genetic eye disease. Allergan has the right to opt in on that program. Whether with Allergan's participation or not, Editas could file sometime next year for FDA approval to begin its second clinical study of a CRISPR therapy.

Intellia Therapeutics should take a big step next year as well. The company anticipates filing for FDA approval by the middle of 2020 to begin a clinical study evaluating CRISPR therapy NTLA-2001 in treating rare genetic disease transthyretin amyloidosis.  

Potential investing strategies

There are several ways that investors could profit from what should be the biggest year yet for CRISPR gene-editing stocks:

  1. Buy shares of one or more CRISPR-focused biotech stocks.
  2. Buy shares of one or more of the major partners of the CRISPR-focused biotech stocks.
  3. Buy shares of an exchange-traded fund (ETF). 

Option 1 provides the greatest potential for big gains, followed by option 2 then option 3. However, investing in biotech stocks, regardless of which alternative you use, comes with risks -- especially the risk of clinical failure. Option 1 involves the greatest risk, with options 2 and 3 offering less risk.

Investors who like option 1 will probably want to put CRISPR Therapeutics and Editas Medicine at the top of the list, since both biotechs are ahead of Intellia in pipeline development.

Major partners for option 2 include Vertex, Allergan, Bayer (which, like Vertex, partners with CRISPR Therapeutics and owns a stake in the company), Bristol-Myers Squibb (which thanks to its acquisition of Celgene is a partner with Editas), and Regeneron (which partners with Intellia). You could also throw AbbVie into the mix, since it's in the process of acquiring Allergan. Vertex probably offers the greatest growth prospects with its strong cystic fibrosis franchise.

For option 3, the SPDR S&P Biotech ETF's holdings include Editas, Intellia, Vertex, Regeneron, and AbbVie. Also, the iShares Nasdaq Biotechnology ETF owns shares of CRISPR Therapeutics, Editas, Intellia, Vertex, and Regeneron.   

I've taken an "all of the above" approach, owning shares of a CRISPR-focused biotech, three major partners of CRISPR-focused biotechs, and one of the top biotech ETFs. My view is that 2020 will be the biggest year thus far for CRISPR gene-editing stocks but also a very good year for biotech stocks, in general.

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.