Many investors were skeptical of biotechs specializing in gene editing three years ago. Though some had made clinical progress, few had launched any product. Since then, there have been more clinical wins and several more launches in this field.
Unfortunately, Intellia Therapeutics (NTLA 3.70%) hasn't been one of the top performers in this niche. The biotech's shares are down by 30% over the past year. Is it worth buying Intellia Therapeutics' shares right now? Let's find out.
Intellia Therapeutics' promising programs
It's not a great time to be a clinical-stage biotech, which is exactly what Intellia Therapeutics is. Though the company has some promising programs, it generates little revenue and is consistently unprofitable. Still, meaningful progress from its leading candidates could send its stock price soaring, especially as they inch closer to approval.
Intellia's most advanced program is NTLA-2001, which aims to treat transthyretin amyloidosis, a rare disease that causes various symptoms, including muscle weakness. Intellia Therapeutics is developing NTLA-2001 with the collaboration of a biotech giant, Regeneron. That's a great sign. Partnering with Regeneron will help Intellia Therapeutics fund the development of this program without necessarily having to resort to dilutive means of financing.
Intellia Therapeutics already started enrolling patients for a phase 3 study for NTLA-2001 in treating the non-hereditary version of transthyretin amyloidosis; it plans to dose the first patient during the first quarter. It is also preparing a late-stage study for NTLA-2001 in targeting hereditary transthyretin amyloidosis. Of note, roughly 50,000 patients suffer from the hereditary kind of transthyretin amyloidosis, while between 300,000 and 500,000 people have the non-hereditary brand.
It will be two years (an optimistic estimate) before Intellia launches NTLA-2001 if it records positive results in late-stage clinical trials. But if it goes that far, the potential is enormous. There is no cure for transthyretin amyloidosis. NTLA-2001 could become the first. It is being developed as a one-time curative treatment. With a patient population north of 350,000 -- and considering how expensive gene-editing therapies tend to be -- this product could become highly successful.
Intellia Therapeutics does have another product in clinical trials: NTLA-2002, an investigational treatment for hereditary angioedema. The biotech is running a phase 1/2 study for this program. It plans to release data from the ongoing trial this year while also starting a phase 3 study.
Lots of patience required
Intellia Therapeutics ended 2023 with $1 billion in cash, equivalents, and marketable securities, compared to $1.3 billion a year earlier. Management thinks that will be enough to last until mid-2026. A lot could happen in the meantime. Positive results from the company's ongoing clinical trials could jolt the stock price, as would regulatory progress. However, this is a double-edged sword.
There is no guarantee that Intellia Therapeutics' programs will be successful, even with Regeneron's partnership. The recent approval of Casgevy, the first CRISPR-based gene-editing therapy to be launched, helps give more credence to Intellia's CRISPR-focused platform, but there are plenty of potential pitfalls ahead. Only investors who can stomach significant risks should consider initiating a small position in this biotech stock.
