Shares of Editas Medicine (NASDAQ:EDIT) sank 11.4% as of the market close on Wednesday. The big decline came after AbbVie (NYSE:ABBV) announced a partnership with privately held Caribou Biosciences to develop chimeric antigen receptor T cell (CAR-T) therapies.
Why did AbbVie's deal with Caribou cause Editas stock to fall? Probably because the big drugmaker canceled a collaboration with Editas last year to develop a gene-editing therapy. Some investors appear to be viewing AbbVie's new partnership with Caribou as a clear snub of Editas.
However, there are a couple of key points to keep in mind. First, Editas originally teamed up with Allergan -- not AbbVie. It was only after AbbVie's acquisition of Allergan in 2020 that the company scrapped its agreement with Editas. Second, the Editas-Allergan partnership focused on a gene-editing therapy targeting a rare eye disease, not a CAR-T therapy.
In the big scheme of things, the AbbVie-Caribou deal doesn't matter for Editas. What does matter is how the biotech's pipeline candidates fare in clinical testing.
Editas has begun dosing patients for the safety portion of a phase 1 study evaluating EDIT-301 in treating sickle cell anemia. However, the company must obtain U.S. Food and Drug Administration (FDA) approval for an improved potency assay before it can enroll patients in the efficacy phase of the study. Editas' shares could enjoy a bump when it jumps this hurdle.
Also, Editas expects to report initial results by the end of this year from a phase 1/2 study evaluating EDIT-101 in treating rare genetic eye disease Leber congenital amaurosis 10. If those results are positive, it'll almost certainly provide a major catalyst for the biotech stock.