It's been a tough year for Editas Medicine (EDIT -7.83%) so far. As of the market close on Monday, the stock was down 42%. But shares of Editas were rebounding by 8.2% as of 11:25 a.m. EST on Tuesday. The biotech didn't report any news. Instead, Editas' share price was buoyed by the overall stock market resurgence.
Should investors read a lot into today's gain? Probably not.
The stock market is enjoying a good day in large part because of anticipation that the $1.9 trillion stimulus bill that's being voted on in the U.S. House of Representatives today will help boost the economy. And the legislation probably will spur economic activity.
However, clinical-stage biotech stocks such as Editas aren't impacted all that much by what goes on with the economy. Clinical studies and progress toward regulatory approval are much more important for companies like Editas.
On the other hand, part of the reason behind Editas' steep decline, especially in recent weeks, has been due to investors souring on growth stocks. If today's gains instill renewed confidence among investors, it could work to Editas' benefit.
The most important thing for investors to watch with Editas Medicine going forward is its pipeline progress. The company expects to report initial results from its early-stage study evaluating EDIT-101 in treating rare genetic eye disease Leber congenital amaurosis 10 later this year. Editas plans to kick off a phase 1/2 study of EDIT-301 in treating sickle cell disease in 2021 as well.