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Where Will Editas Medicine Be in 5 Years?

By Jim Halley - Feb 17, 2021 at 6:30AM

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In a field that's becoming more crowded, what will set Editas apart?

CRISPR gene-editing technology has been described as a modified protein that acts as pair of scissors to snip parts of DNA to target parts of a specific gene, or gene mutation. To work the metaphor further, Editas Medicine (EDIT -1.18%) is on the cutting edge of CRISPR.

The company's stock has climbed more than 114% in the past year, even though it doesn't yet have a marketable therapy. That's because CRISPR is considered the next big thing. Imagine therapies that don't just treat diseases, but cure them, with a single dose, by instructing the body to turn off targeted defective DNA. One study in the journal Nature said CRISPR technology could cure up to 89% of all genetic birth defects.

That's the dream, at least. The reality is that the technique is very much in its infancy, and to date, no CRISPR therapy has been approved for use by the U.S. Food and Drug Administration (FDA). So where does Editas Medicine sit in this exciting field of genetics play?

DNA sequencing.


What's the potential?

Editas doesn't yet have any drugs in advanced trials, doesn't turn a profit, and what little revenue it does make is from collaboration efforts with other pharmaceutical companies. What it does have, according to the company, is enough cash (at $541 million), with no debt, to last it until 2023.

That gets back to the question -- where will Editas be in five years?

Although we lack a crystal ball, we know it can take as many as 15 years for a drug to go through clinical trials before it becomes a marketable therapy. Editas' two most promising candidates are still in early stage trials. If either is approved, it would be a huge moment, not just for Editas, but for either of its main competitors, CRISPR Therapeutics and Intellia Therapeutics. All three companies went public in 2016 and are working to find therapies using CRISPR editing.

The reason why CRISPR is the current technology of choice is that there are at least 10,000 diseases caused by a single genetic mutation. CRISPR technology has the potential to treat and possibly cure those diseases, including some of the more common ones, such as hemophilia, genetic blindness, cystic fibrosis, Huntington's disease and Duchenne's muscular dystrophy. One study, using data from the National Center for Health Statistics found that, from 1979 through 1992, 320,208 deaths in the United States alone were associated with birth defects and genetic diseases.

Last month, the FDA gave approval for Editas to begin a phase 1/2 study by dosing sickle cell disease (SCD) patients with EDIT-301, an ex vivo gene-editing cell medicine. Ex vivo refers to the process of taking cells out of a body, manipulating them, and then resubmitting them.

SCD is inherited and it leads to an accumulation of hemoglobin S, abnormally shaped red blood cells that can clog blood vessels and cause tremendous pain. According to the Centers for Disease Control and Prevention (CDC), SCD affects roughly 100,000 people in the United States, and occurs in 1 of every 365 black births in the U.S.. The company is also looking at EDIT-301 as a treatment for beta-thalassemia, an inherited blood disorder through which the production of hemoglobin in the blood is limited.

At present, there's only one cure for SCD -- a bone marrow transplant. The problem is, bone marrow transplants are expensive and dangerous, and require bone marrow from a closely matched donor without the disease, such as a sibling. Only 2% of the U.S. population is on the bone marrow registry and many minority groups are underrepresented in the registry.

The company's other candidate in trials is EDIT-101, which may be used to treat Leber congenital amaurosis 10, the most common cause of inherited childhood blindness. The company began a phase 1/2 trial with EDIT-101 last March, targeting mutations in the centrosomal protein (CEP) 290 gene. The company said subjects are given a dose of EDIT-101 with a sub-retinal injection, with the intention of removing the CEP290 mutation, restoring normal photoreceptor function and vision. Editas said it plans to present clinical data on the EDIT-101 trial by the end of the year.

A patent fight is a consideration

Jennifer Doudna, a biochemist at UC Berkeley, and Emmanuelle Charpentier, now with the Max Planck Institute for Infection Biology, received the Nobel Prize in Chemistry last year for their work on CRISPR gene-editing technology.

The pair are currently embroiled in a patent fight over the discovery with Editas and other companies. The latest round of the battle went against the Nobel winners, with the Patent Trial and Appeal Board (PTAB) saying in September that the plaintiffs on Editas' side had priority in its already granted patents for uses of the CRISPR system in eukaryotic cells, which is any cell that has a clearly defined nucleus.

The decision isn't final, however, and until the matter is, it could impede CRISPR innovation.

The other concern for Editas is that it isn't as strong a financial shape as its top competitor, CRISPR, which had more than $1 billion in cash in his last quarterly report and is further advanced, with four therapies in clinical trials.

EDIT Chart

EDIT data by YCharts

Not a short-term stock

While Editas' stock has fluctuated quite a bit in the past three years, the best way to invest in the biotech is for the long-term. There's plenty of risk. There are concerns over the safety of gene editing and whether the solutions will in fact last. However, the upside is so great, it makes sense to invest in one of the three main gene-editing biotech companies.

If you do, you won't be alone. Ark Investment Management, an early investor in Tesla, Square, and Roku, owns $299 million worth of the Editas stock, along with of $707 million of CRISPR Therapeutics stock.

No one knows exactly where the stock will be in five years, but Editas' potential could be transformative in the industry -- and that's the best reason to buy and hold it for the long run.

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Stocks Mentioned

Editas Medicine, Inc. Stock Quote
Editas Medicine, Inc.
$10.89 (-1.18%) $0.13
Tesla, Inc. Stock Quote
Tesla, Inc.
$674.90 (1.66%) $11.00
Block, Inc. Stock Quote
Block, Inc.
$83.40 (-0.05%) $0.04
Intellia Therapeutics Stock Quote
Intellia Therapeutics
$47.32 (-0.88%) $0.42
CRISPR Therapeutics Stock Quote
CRISPR Therapeutics
$54.71 (-2.89%) $-1.63
Roku Stock Quote
$91.77 (-2.58%) $-2.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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