The race to develop a new gene therapy with CRISPR took some interesting turns recently. On the same day that Intellia Therapeutics (NTLA -0.75%) dazzled the medical community with clinical trial results for its lead candidate, the fight for intellectual property rights related to all its candidates took a sharp turn for the worse.
Do solid clinical trial results make Intellia a good stock to buy now? Or does the latest legal news about CRISPR signal more trouble ahead than investors can handle?
Good news from Intellia
On Feb. 28, Intellia and its collaboration partner Regeneron Pharmaceuticals reported interim clinical trial results from the first 15 patients treated with the company's lead candidate, NTLA-2001. This is a one-and-done gene therapy for patients with transthyretin (ATTR, or sometimes just "TTR") amyloidosis, a progressive and often fatal condition that happens when ATTR begins breaking up into smaller fragments.
Just one administration of NTLA-2001 sabotages the TTR gene in an attempt to permanently inhibit the production of this troublesome protein. The interim results recently reported by Intellia suggest that the therapy works even better than anyone expected. Among six patients given the highest dose tested so far, circulating ATTR dropped by an average of 93% in samples taken 28 days after receiving the treatment.
Image source: Getty Images.
Intellia also highlighted encouraging signs that suggest the benefit lasts a long time. That's an important distinction for a drug that patients will receive just once.
Bad news from the Patent Trial and Appeal Board
The U.S. Patent and Trademark Office's Patent Trial and Appeal Board recently threaded a fine needle. In a nutshell, Emmanuelle Charpentier (formerly at the University of Vienna) and Jennifer Doudna (at the University of California, Berkeley) get to keep a Nobel Prize for their discovery that a mechanism bacteria use to fight infections, now known as CRISPR-Cas9, can be used to edit genetic information.
Unfortunately for the University of California system, the University of Vienna, and Charpentier, the panel of judges said the right to use CRISPR-Cas9 to edit DNA in just about every living thing that isn't bacteria belongs to the Broad Institute of Harvard and MIT. This could be a problem for Intellia, because the company has a license to develop CRISPR drugs from Team Charpentier, not the Broad Institute.
A long timeline
Before you even think about buying Intellia Therapeutics' stock, it's important to appreciate the timeline its business faces. As an all-new therapy that makes permanent genetic changes, NTLA-2001 is going to need years of near-perfect safety data before it has any chance at earning approval from the U.S. Food and Drug Administration.
As a one-shot treatment intended for a very limited population of patients, NTLA-2001 also needs to command a seven-figure price tag to generate any profits for Intellia and its shareholders. That could be extremely difficult, because it will have to compete with Alnylam Pharmaceuticals' Onpattro for TTR amyloidosis patients with nerve damage.
In the second half of 2022, Intellia will present interim results from NTLA-2002. This is an experimental gene therapy for the treatment of hereditary angioedema (HAE). Unfortunately, it will be years before the company can prove that NTLA-2002 outperforms Orladeyo, an increasingly popular treatment for HAE that BioCryst Pharmaceuticals launched in 2020.
Intellia's market valuation has fallen by more than half since it peaked last year, but the company's market cap is still up around $5.9 billion. That's a lot for a company that lost $268 million last year. Developing new drugs gets increasingly expensive as those candidates move toward commercialization, so the losses will most likely accelerate. This makes Intellia an extremely risky stock under the best circumstances.
With a real chance that Intellia could have to relicense the rights to develop all of its drug candidates from the Broad Institute, it's probably best to watch this story unfold from a safe distance.
