Shares of CRISPR Therapeutics (NASDAQ: CRSP), a clinical-stage pioneer of the genome editing technology everyone's talking about, fell 25.5% in December, according to data from S&P Global Market Intelligence. A market meltdown that dragged the Nasdaq Biotechnology index 11.2% lower last month and a rough year for expensive new therapies were to blame.
In 2018, impressive new treatments similar to those CRISPR's developing disappointed investors with lower-than-expected sales. It turns out that really expensive treatments that only require a single dose aren't that easy to sell.
Image source: Getty Images.
In late 2018, CRISPR began enrolling patients with sickle cell disease and beta-thalassemia into proof-of-concept studies with its first candidate, CTX001. This experimental therapy involves altering a patient's own hematopoietic stem cells outside the body, and then reinfusing them into the bone marrow, where they're supposed to produce fetal hemoglobin. CRISPR's lead candidate aims to reduce these patients' reliance on blood transfusions for life with a single administration, but it could have competition from a much simpler candidate that's closer to pharmacy shelves.
At the beginning of September, Celgene (NASDAQ: CELG) and Acceleron (NASDAQ: XLRN) announced successful pivotal trial results for luspatercept. Beta-thalassemia patients injected with the first-in-class erythroid maturation agent significantly reduced their dependence on blood transfusions. Although the reductions were relatively minor compared to those CRISPR aims to produce with CTX001, a simple injection is much easier to sell.
Luspatercept isn't the only potential competitor for CRISPR's lead candidate. CTX001 could also run into LentiGlobin from bluebird bio (NASDAQ: BLUE). LentiGlobin's another one-shot cellular therapy that involves removing, and then reinfusing a patients stem cells.
LentiGlobin uses a virus to inject a functional adult hemoglobin gene, and it's proving a tough act to follow. LentiGlobin's in late-stage development, while CTX001 didn't start enrolling patients in its first human proof-of-concept studies until late in 2018.
Recently, CRISPR stock recovered somewhat after the FDA agreed to fast-track CTX001. That will speed up development, but CTX001 will never have a chance to produce meaningful sales if it can't outperform the impressive results LentiGlobin's already produced.
More From The Motley Fool
- 10 Best Stocks to Buy Today
- 3 Stocks That Are Absurdly Cheap Right Now
- 5 Warren Buffett Principles to Remember in a Volatile Stock Market
- The $16,728 Social Security Bonus You Cannot Afford to Miss
- The Must-Read Trump Quote on Social Security
- 10 Reasons Why I'm Selling All of My Apple Stock