There's clearly some long-term potential in the gene editing space, but it's also an industry that many investors don't understand too well. In this Fool Live video clip, recorded on May 24, contributor Brian Orelli, PhD, and chief growth officer Anand Chokkavelu give an overview of gene editing and CRISPR. 

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Anand Chokkavelu: I think a lot of our viewers might need a refresher on just the basic science of what all three of these companies rely on. Brian Orelli, I'm used to saying the last name because we have so many Brians. What is gene editing and what is CRISPR in this context?

Brian Orelli: Yes. CRISPR are a type of gene editing, stands for clustered regularly interspaced short palindromic repeats. It was discovered in bacteria. Bacteria basically use it to protect themselves against viral infections. The CRISPR is able to recognize viral DNA and then uses a guide RNA to recognize that for specific sequence for the virus, so it doesn't cut its own DNA, but it cuts the viral DNA and that helps it to protect against the virus. Two doctors, Emmanuelle Carpentier and Jennifer Doudna, realized that they could purify the components of CRISPR and then use it to edit a specific spot in human genome and they won that Nobel price for that in 2020. It's a lot easier to make the mutations in the genes to knockout their function. In theory, you could also make precise mutations like the single-based pair level to change the DNA, but that's considerable harder than just knocking it out completely because it creates a double-centered break. Once you break the DNA, then when it gets to be paired back together they usually knocks out the function of that gene.

Chokkavelu: Are there other types of gene editing being used commercially besides CRISPR?

Orelli: I don't think anything's used commercially, but there's definitely companies using other types of gene editing in clinical trials. Beam Therapeutics, it's not quite in clinical trials yet, but they're using base editing to edit specific bases. It's using some aspects of CRISPR, but instead of making a double-centered break, you are editing a specific base, which would allow them to make those precise changes that I said aren't very easy with CRISPR that makes a double-stranded break. Sangamo Therapeutics (SGMO 2.73%), ticker SGMO, they've been working on zinc finger nucleases, which is a type of gene editing. For quite a while they've had some struggles, but it seems like maybe they finally figured it out. Then Precision BioSciences (DTIL 9.20%), ticker there is DTIL. They have ARCUS gene editing. They're using it to to do off-the-shelf CAR-Ts and Gene corrections. It's a fairly low market cap, so I think that tells me that it's like $600 million versus the CRISPR companies are all in the billions. That tells me that maybe investors aren't quite confident that its ARCUS gene editing system works as well as CRISPR can.

Chokkavelu: One more follow-up along this line. How disruptive is this technology? What all could replace as a therapy and over how many diseases?

Orelli: I think in general, the companies are starting with the diseases that don't have any treatments and that makes sense why go and compete with somebody if you don't have to. They're going after diseases for the most part that don't have yet any treatments. In theory, CRISPR could replace small molecule inhibitors, that inhibit a protein, where antibody drugs, they bind protein to inhibit it. The disadvantage is that in CRISPR you're either on or off, so you knock out the gene and now you don't have any expression. Where with a drug, you can dampen the activity of the protein by increasing or decreasing the amount of drug being given, not inhibit all of the molecules. That important because there're some diseases where you can't knock out the entire protein that the drug is inhibiting, so CRISPR is not going to work for there.

Chokkavelu: Like a dimmer switch versus an on-off switch.

Orelli: Yeah, exactly. CRISPR comes in two flavors, one is an actual treatment, so you put it in the body and then edit the cells in the body to knock out or change the function of the protein. Then the other option is, so CRISPR as a tool, so that would be called either in vitro or ex vivo. In the test tube, or outside of the body, and that would be take cells outside of the body, edit them in a laboratory, and then put them back in. Or you could also edit cells, so we could edit like CAR-T cells to make off-the-shelf instead of you would edit them so that they would no longer be recognized by the patient's immune system as being foreign. You can delete those genes that trigger the immune reaction, and then that would allow you to give CAR-T, which is a type of cancer treatment to patients and use just any donor cells, and then manufacture them in a manufacturing plant.