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Why Vertex Is Expanding a Gene-Editing Partnership -- and It's not With CRISPR Therapeutics

By Keith Speights and Brian Orelli, PhD – Sep 4, 2021 at 7:55AM

Key Points

  • Arbor Biotechnologies recently announced an expanded collaboration with Vertex to develop CRISPR gene-editing therapies.
  • The deal is worth up to $1.2 billion, but the amount of any up-front payment from Vertex wasn't revealed.

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Vertex plans to work more closely on CRISPR gene editing with a small privately-held biotech.

Vertex Pharmaceuticals (VRTX -1.01%) has worked closely with CRISPR Therapeutics (CRSP -0.07%) for quite a while to develop a CRISPR gene-editing therapy targeting rare blood diseases. Recently, Vertex expanded a partnership focused on CRISPR gene editing, but it's not with CRISPR Therapeutics. In this Motley Fool Live video recorded on Aug. 25, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss why Vertex is expanding its collaboration with Arbor Biotechnologies.

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Keith Speights: Vertex Pharmaceuticals, the ticker there is VRTX, is expanding a partnership with a smaller biotech that's focused on CRISPR gene editing. But we're not talking about CRISPR Therapeutics in this case.

Yes, Vertex is a partner with CRISPR Therapeutics. They've worked together for several years. They have a very promising CRISPR gene editing therapy. But in this case, Vertex is making a move with a small privately held company called Arbor Biotechnologies. So Brian, what's behind Vertex's expanded collaboration with Arbor?

Brian Orelli: Yeah, Arbor is using gene editing to make ex vivo engineered cell therapies, so you pull cells out of the patient, manipulate their cells and then put them back into the patient. The deal covers seven different areas of focus.

They disclosed a couple of them. So there's insulin-producing hyperimmune isolate cells. They want to use those for the treatment of Type 1 diabetes and then they are doing, and I'm quoting next-generation approaches in sickle cell disease and beta-thalassemia. I'm sure CRISPR Therapeutics was not happy to hear about that since both those indications are their lead indication for their lead treatment, and then there's the other undisclosed diseases, up to seven different programs.

Vertex's paying an undisclosed up-front payments, and then they're paying up to $1.2 billion in milestones. Although some of those are regulatory and commercial milestones so those obviously wouldn't get paid until it was clear that the drugs were working.

Speights: Yeah interestingly, in this case, the press release only came from Arbor Biotechnologies. Vertex didn't have anything on its website about this deal.

I'm not sure if Vertex was intentionally trying to downplay it because of the relationship with CRISPR Therapeutics or if this was just obviously this is a bigger deal for Arbor. It makes sense that they would be trying to get this word out and maybe that the financial terms, as you said, there up to $1.2 billion in milestones, maybe that it wasn't a really large up-front amount here.

Orelli: Yeah, I'm sure it's not material to Vertex's financial situation in the near term, or even medium term.

Speights: Yeah, I think you're Vertex shareholder, right, Brian?

Orelli: Yeah.

Speights: Yeah, I am too. I like Vertex doing deals like this. I don't have a problem with them looking outside of the partnership with CRISPR Therapeutics to look at other gene-editing technology and other approaches, other candidates.

Orelli: They have cystic fibrosis that could potentially put all their whole franchise of drugs out of business if it worked better, so they're always constantly trying to improve.

Speights: Yeah, and Vertex is another company with a hefty cash stockpile and, hey, put that money to use.

Keith Speights own shares of Vertex Pharmaceuticals. The Motley Fool owns shares of and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Vertex Pharmaceuticals Stock Quote
Vertex Pharmaceuticals
VRTX
$312.98 (-1.01%) $-3.18
CRISPR Therapeutics Stock Quote
CRISPR Therapeutics
CRSP
$54.99 (-0.07%) $0.04

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