Novartis: "Hey, everyone, look over here. I just entered into a collaboration that will give me access to a pretty intriguing genome editing tool. Going to combine it with my top pipeline candidate. It's pretty cool."
AstraZeneca (NYSE:AZN): "I see your single collaboration, and I raise you four collaborations for the same precision medicine tool!"
It's true. AstraZeneca recently announced four collaborations that will complement and expand internal research and development efforts with the exciting new genome editing tool called CRISPR/Cas9. Four research institutes and Thermo Fisher Scientific (NYSE:TMO) will work with AstraZeneca to research the role specific genes play in various diseases, develop and commercialize research tools, and identify new potential drug targets.
Why are biotech companies racing to use CRISPR/Cas9? The genome editing tool is capable of being fine-tuned to target single or multiple genes to activate, silence, or cut them out of your genome entirely (it can add new genes, too). It's also easier to work with than previous gene editing technologies such as zinc fingers from Sangamo Biosciences, and is more specific, more permanent, and faster to implement than gene therapy technologies such as RNAi tools from Alnylam Pharmaceuticals.
AstraZeneca is hoping to use CRISPR/Cas9 across its portfolio to develop new treatment options for cancer, cardiovascular, metabolic, respiratory, autoimmune, and inflammatory diseases. Investors may like the sound of that, but it's easier said than done. Before the biotech can throw a therapeutic into the clinic it must understand (1) exactly which genes contribute to the disease in question and (2) what type of drugs could provide treatment. This, not drug development, is actually where all four collaborations begin.
Two collaborations will conduct research to better understand the specific role genes or groups of genes play in disease, although there are slight differences. The Wellcome Trust Sanger Institute will focus on deleting genes, while The Innovative Genomics Initiative will focus on activating or deactivating genes. The specificity and quickness of CRISPR will provide advantages over previous methods for studying disease-causing genes, which were slower and less accurate.
What's the point? AstraZeneca is hoping the research provides insights that will help develop new precision drugs capable of treating a range of diseases. After all, the list of the world's best-selling drugs is littered with highly specific therapeutics.
Take Herceptin from Roche as an example. The drug inhibits the production of proteins called HER2, which control cell division. In certain breast cancers, overproduction of HER2 causes cells to divide uncontrollably, thus speeding cancer progression. Herceptin has been demonstrated as safe (thanks to its specificity for HER2) and effective since it was approved by the U.S. Food and Drug Administration in 1998, but sales, which reached $6.84 billion in 2013, continue to grow.
Many believe CRISPR therapeutics can match, or even beat, the precision of even the most successful drugs today and lead to treatments for diseases that are currently labeled "untreatable". There's a long road ahead, however.
Practice runs on real cell lines
The remaining two collaborations will throw millions of CRISPR combinations at specific disease cell lines in an attempt to identify new disease and drug targets. Thermo Fisher Scientific will provide AstraZeneca with various RNA-guides, or the pieces of the genome editing tool that find specific genes (think a heat-seeking missile, biotech style), that are active against human genes. Meanwhile, the collaboration with the Broad Institute and Whitehead Institute will focus solely on cancer drugs.
What's the point of this work? In both cases, AstraZeneca and its partners will test CRISPR combinations against cells in the lab that mimic the effects of disease with hopes to uncover potential drugs. The idea is that precise genome editing tools will identify drug targets other biotech companies have missed (or couldn't pick out of the noise in their own research), allow the company to design better test systems for drug discovery, and discover potential problems to a drug's safety or effectiveness earlier in drug development.
What does it mean for investors?
CRISPR/Cas9 has yet to enter a single clinical trial, but AstraZeneca's focus on precision medicine could eventually translate into lower research and development costs and a handful of promising drug candidates capable of enabling future growth. That would be a welcomed advance for investors, which have watched the company's annual revenue and net income fall 24% and 74%, respectively, from 2011 to 2013.
However, success is not guaranteed. Because of its promise many biotech companies will likely conduct research into CRISPR/Cas9 therapeutics, as Novartis demonstrated recently. That limits the already slim likelihood that AstraZeneca finds the next HER2 inhibitor or better. This is a fascinating area of research with a great deal of potential, but it's still too early to get overly excited. Shareholders should still be happy that the company is thinking with its long-term hat on, although this is merely something to watch for now.
Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio, CAPS page, previous writing for The Motley Fool, and follow him on Twitter to keep up with developments in the synthetic biology field.
The Motley Fool recommends Alnylam Pharmaceuticals and Thermo Fisher Scientific. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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