Intellia Therapeutics (NTLA 3.70%) and CRISPR Therapeutics (CRSP 0.34%) have one big thing in common: They both specialize in the hot area of gene editing, or the repairing of faulty genes responsible for disease. But CRISPR Therapeutics is farther along on the path to commercialization, recently scoring its first product approval, while Intellia's candidates remain in the clinical trial stage.
CRISPR Therapeutics' product approval -- the world's first for a CRISPR-based gene editing therapy -- is making headlines and turning investors' attention to this exciting technology. And as is usual in this sort of situation, investors are looking for the next big success story in the industry so that they can invest early and win over time. Could Intellia become the next CRISPR Therapeutics? Let's find out.
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Two experts in gene editing
Like CRISPR Therapeutics, Intellia uses CRISPR gene-editing techniques. CRISPR stands for "clustered regularly interspaced short palindromic repeats" of genetic information and was inspired by the systems some bacteria use to defend themselves from viruses. The technique involves cutting DNA at a certain location and harnessing the power of a natural repair process. As part of this, Intellia's science can inactivate a problem-causing gene and/or insert a functioning gene.
Intellia has several candidates in the pipeline, but the two most advanced address transthyretin amyloidosis (ATTR) and hereditary angioedema (HAE). ATTR, caused by accumulation of misfolded transthyretin protein, affects many organs including the heart and kidneys. HAE, caused by overproduction of peptide bradykinin, leads to recurrent and unpredictable swelling.
The company has made significant progress in both programs recently and is heading into late-stage development with NTLA-2001 for ATTR with cardiomyopathy. Intellia aims to launch a phase 3 trial by the end of the year, and the company is involved in discussions with regulators to potentially launch a phase 3 study of the candidate for ATTR with polyneuropathy in the near future.
As for HAE, Intellia has identified all patients for its phase 2 trial of NTLA-2002 and plans to complete enrollment by the end of the year. The company says it may initiate a phase 3 trial as early as the third quarter of next year.
So, if all goes well, Intellia could find itself approaching the finish line with two candidates within the next few years.
Is there room for more than one player?
Now you may be thinking to yourself: "CRISPR Therapeutics made it to market first. Is there room for another gene editing player?" And the good news -- for many of these companies -- is that there is indeed room for more than one player to succeed. These companies aren't necessarily developing treatments for the same indications. CRISPR Therapeutics' recently approved product, Casgevy, addresses blood disorder sickle cell disease -- and it aims to score an approval in beta thalassemia early next year.
So, could Intellia become the next CRISPR Therapeutics? Like its bigger rival, it's also partnering with a large biotech company on its lead program. CRISPR Therapeutics and Vertex Pharmaceuticals share ownership of Casgevy, while Intellia and Regeneron Pharmaceuticals share in the development of NTLA-2001.
Intellia also isn't far from CRISPR Therapeutics when it comes to market capitalization. Just a few months ago, CRISPR Therepeutics' market cap fell to about $3 billion , not far from Intellia's level today.
Intellia's market value a few years ago climbed to more than $12 billion, but has since dropped to about $2.5 billion. And at times, Intellia's market cap even outpaced that of CRISPR Therapeutics.
NTLA Market Cap data by YCharts
It's easy to imagine progress in clinical trials or eventually a product approval driving investors to buy the stock and bringing Intellia's market value in line with that of its bigger rival.
Following in CRISPR Therapeutics' footsteps
Intellia is also following in CRISPR Therapeutics' footsteps when it comes to maintaining a strong cash position. In the most recent quarter, Intellia reported cash levels of more than $992 million. CRISPR Therapeutics' cash position in the recent quarter totaled about $1.7 billion.
So, what does this mean for you as an investor? Of course, biotech companies that don't yet have a product on the market carry a certain amount of risk -- a candidate could fail at any point in development and weigh heavily on share performance.
But if you can accept this risk, and you're looking for the next potential gene-editing star, Intellia is a great stock to buy. The company could become the next CRISPR Therapeutics, and score more than one win for your portfolio over time.
