On Sept. 14, 1990, Ken Griffey Jr. and Ken Griffey Sr. made history by hitting back-to-back home runs. However, the day is also memorable for another remarkable event: A 4-year-old girl named Ashanti DeSilva became the first person to receive gene therapy, a procedure that involved injecting her with modified white blood cells to boost her immune system.
DeSilva suffered from a rare genetic disorder that impaired her immunity, but the groundbreaking gene therapy helped her live a normal life. However, gene therapy as a field struggled in the immediate aftermath because of safety concerns stemming from problematic delivery vehicles.
Image source: Getty Images.
This fundamental problem plagued the field until the early 2010s, when new gene correction technologies, along with safer delivery systems, helped researchers transform gene therapy into a viable modality for a broad range of inherited disorders.
A key inflection point
In recent history, one of the most promising applications of gene therapy is the treatment of sickle cell disease (SCD), a blood disorder that affects an estimated 70,000 Americans. SCD causes red blood cells to become sickle-shaped and sticky, leading to anemia, pain, infections, and organ damage. There is no cure for SCD, but a new gene therapy developed by CRISPR Therapeutics (CRSP 0.34%) and Vertex Pharmaceuticals (VRTX -0.06%) could change that.
The therapy, called exa-cel, uses a gene-editing tool called CRISPR/Cas9 to modify a patient's stem cells, which allows them to produce high levels of fetal hemoglobin. The edited cells are then infused back into the patient, where they can produce healthy red blood cells. Exa-cel has shown impressive efficacy results in clinical studies, and could soon become the first approved gene therapy for SCD.
This week, exa-cel will face a critical test: an advisory committee meeting with the Food and Drug Administration (FDA). The committee will review the safety and efficacy data of exa-cel and make a recommendation to the FDA on whether to approve it or not.
The FDA usually follows the committee's advice, but not always. The outcome of this meeting could have a significant impact on the future of gene therapy and biotechnology in general. But that doesn't mean investors should pile into gene therapy stocks expecting a massive windfall this week.
The state of play in biotech
Despite shepherding a neat idea to a possible regulatory approval in about 10 years' time, CRISPR Therapeutics has lost about $12 billion worth of market capitalization over the prior three years. That's the core reason the market isn't convinced exa-cel will be a slam-dunk commercial success if the FDA does indeed give the green light to the therapy this December.
A handful of other gene therapies, including Bluebird Bio's lovo-cel, Beam Therapeutics' base-edited candidates, and Editas Medicine's rival CRISPR/Cas9 therapy, are all in development for SCD, and some of these experimental therapies might be safer than exa-cel. There are a lot of moving parts in this market, and drawing any firm conclusions simply isn't warranted at the moment.
Traders and investors alike are probably considering whether CRISPR Therapeutics' stock is poised to jump in the event Tuesday's meeting paves the way for regulatory approval. However, the hard truth is that investors probably shouldn't even be asking themselves this question right now.
The market has become deeply irrational about biotech stocks -- as evidenced by the dozens of companies trading close to their last stated cash position. What's more, numerous companies have been treated to hefty sell-offs immediately after releasing positive clinical or regulatory news in 2023. In other words, it wouldn't be surprising if CRISPR Therapeutics' stock actually fell on a positive panel vote.
Keep the long term firmly in mind
Instead of focusing on the short term, though, savvy investors should be considering how they can capitalize on this dour market for biotech stocks. The bottom line is that this gene-editing pioneer could be the next Amgen or perhaps Regeneron Pharmaceuticals. Both of these biotech heavyweights delivered life-changing gains for early shareholders:
AMGN Total Return Level data by YCharts
CRISPR Therapeutics' broad pipeline of cutting-edge therapies, close partnership with Vertex Pharmaceuticals, and proven ability to translate benchwork into a viable product candidate are all that really matter for investors with a 10- to 20-year horizon. So if the upcoming regulatory meeting is positive and CRISPR Therapeutics' stock fails to launch in response, it might be high time to buy shares hand over fist.
