Gene-editing biotech companies are showing the potential to cure diseases. The Food and Drug Administration (FDA) could approve the first CRISPR gene-editing therapy this year -- exa-cel, developed by CRISPR Therapeutics and Vertex Pharmaceuticals -- to treat severe sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TBT), a blood disorder associated with anemia.
That decision could create a tsunami of investor interest in other gene-editing stocks. Two others to watch for with solid long-term prospects are Beam Therapeutics (BEAM) and Intellia Therapeutics (NTLA -0.84%). Both are clinical-stage biotechs with no marketed therapies and neither is profitable, but that hasn't stopped Cathie Wood's ARK Innovation ETF from gobbling up shares in each.
Which gene-editing stock is the better buy? Let's take a look.
The case for Beam Therapeutics
Beam Therapeutics focuses on precision gene-editing therapies to treat serious diseases. Its stock is down about 36% during the past year. The company has 11 programs in its pipeline.
What differentiates Beam from other gene-editing companies is its ex vivo base editing, which it says is more precise than typical nuclease editing, as done with CRISPR, ZFNs (zinc finger nucleases), and TALENs (transcription activator-like effector nucleases). Base editing uses parts from CRISPR systems, together with other enzymes, to directly install point mutations into cellular DNA or RNA without making double-stranded DNA breaks. That means it keeps both strands of a DNA's double helix intact, lowering the risk of genotoxic stress or other chromosomal abnormalities.
The company's lead therapy, BEAM-101, is a potential one-time curative therapy to treat severe SCD and TBT. It works by switching on dormant fetal hemoglobin (HbF) genes to compensate for adult hemoglobin genes that are nonfunctioning due to genetic mutations.
The company also sees potential in its base editing therapies treating other diseases with single-gene mutations, such as Duchenne muscular dystrophy, progeria (a rare disease that causes premature aging) and the eye disease Leber congenital amaurosis.
Beam is well-connected with other healthcare companies; it has strategic and innovator partnerships with Pfizer and Verve Therapeutics, among others. Because of those collaborations, it has some revenue. Through the first nine months of 2022, it reported collaboration revenue of $40.8 million, up from $775,000 in the same period a year ago. It reported an earnings-per-share (EPS) loss through those nine months of $3.59. Beam is in a fairly strong cash position, with $1 billion in estimated cash, cash equivalents, and securities as of Dec. 31; that gives it enough, it said, to support operations into 2025.
The case for Intellia Therapeutics
Intellia is a gene-editing company whose therapies use the CRISPR/Cas9 system. Its stock is down about 53% during the past year.
Intellia's in vivo editing system uses lipid nanoparticles to deliver nucleic acids directly into cells to treat genetic diseases. For its immuno-oncology and autoimmune therapies, it takes an ex vivo approach by removing a person's own T cells, editing them, and putting them back into the body with enhanced qualities to fight diseases.
The company has nine active programs in its pipeline. Like Beam, it has collaborators, most notably Novartis.
Intellia's lead therapies are NTLA-2001 and NTLA-2002. The company said it plans to submit an Investigational New Drug (IND) application to the Food and Drug Administration in the middle of this year for NTLA-2001 as part of its study to treat transthyretin amyloidosis with cardiomyopathy (a condition of the heart muscle), hoping to begin the study by the end of the year. It also said it plans to submit an IND application for NTLA-2002 to treat hereditary angioedema (a rare disease that causes swelling of the skin and other membranes), and begin a phase 2 trial for the therapy in the first half of this year.
Through the first nine months of 2022, Intellia reported collaboration revenue of $38.5 million, up 91% year over year. It also reported an EPS loss of $4.78 in the period, compared to an EPS loss of $2.68 in the comparable period of 2021. It's in a slightly stronger cash position than Beam, with roughly $1.3 billion in cash as of Dec. 31.
Not an easy choice
The two companies have such similar financials that you can't really make a choice based on their financial reports. However, I see Beam as a better buy because of its unique science, its slightly larger pipeline, and the fact that its lead candidate is further along in development.
My one concern with Beam is that if exa-cel is approved, it may be considered more effective than BEAM-101 to treat SCD and TBT. However, BEAM-101 has other potential applications. And for now, Beam's larger pipeline just gives it more potential than Intellia.
