What happened
Shares of Beam Therapeutics (BEAM -1.69%), a clinical-stage base-editing company, are under heavy pressure today. Specifically, the company's stock is down by a noteworthy 12% on higher-than-normal volume as of 10:36 a.m. ET Monday morning.
What's causing investors to hit the exits this morning? As part of its third-quarter earnings release earlier today, Beam announced that it will not file an investigational new drug application for the next-generation sickle cell disease (SCD) candidate BEAM-102 in 2022. The treatment is a base-editing program designed to correct the point mutation that causes sickling in red blood cells.
Image source: Getty Images.
So what
Instead of moving forward with BEAM-102, the company said that it will focus on improving the safety and efficacy of its other SCD programs. Investors appear to be taking this news to heart over concerns that the biotech's lead SCD candidate, BEAM-101, might not be competitive in the marketplace.
Earlier this year, Beam received clearance from the Food and Drug Administration to begin human trials with BEAM-101. The problem is that this experimental base editor won't generate top-line data until early 2025 at the earliest. By then, there ought to be at least one genome-editing therapy already on the market for this indication. Future genome-based medicines for SCD, in turn, might have to demonstrate superior clinical profiles relative to approved therapies in order to gain traction in the marketplace.
Now what
Is Beam stock a bad-news buy? I think so. The company is slowly building out a powerful new platform to treat a variety of inherited diseases. In turn, these types of course corrections shouldn't necessarily come as a surprise to shareholders. The market thus appears to be overreacting to this relatively minor change in strategy.
