What happened
Shares of Beam Therapeutics (BEAM 3.47%) jumped almost 65% last month according to S&P Global Market Intelligence. The move was in concert with other gene editing companies after Intellia Therapeutics and Regeneron announced results from a phase 1 study. The data indicated the pair had successfully used CRISPR-Cas9 to treat a rare liver disease.
So what
The trial was the first to show that the gene editing approach could be used directly in the body to treat a disease. The drug, NTLA-2001, was given as a single-dose infusion to treat transthyretin (ATTR) amyloidosis. The breakthrough opens the door for other gene editing therapies and approaches such as Beam's base editing technology.
Image source: Getty Images.
Now what
Investors should expect management to take advantage of the increase in the stock price. Just this week, Beam amended a previous agreement with its investment banker, Jefferies Group. The company can now issue shares totaling up to $800 million. That's a huge increase from the $300 million cap of the previous agreement.
Management expects to show significant clinical progress in the second half of 2021. In the next six months, the company anticipates filing its first investigational new drug (IND) application for its sickle cell and beta thalassemia treatment, and begin two more IND-enabling studies.
So far in July, the stock has already given back nearly two-thirds of the June gains. The euphoria over the gene editing milestone may have waned, but it doesn't change the long-term story. Companies like Beam demonstrating a new way to cure disease have incredible potential. Since Wall Street will focus on periodic clinical results, its stock price is destined to be volatile. Shareholders should ignore the swings and stay focused on the scientific progress.
