Investors convinced that CRISPR gene editing is the greatest discovery since the double helix made CRISPR Therapeutics AG (NASDAQ: CRSP) and Editas Medicine, Inc. (NASDAQ: EDIT) two of the best-performing biotech stocks earlier this year. Over the past few months, though, shares of CRISPR Therapeutics have fallen around 42%, and Editas has tumbled 27%.
Which recently discounted gene editing stock has the best chance to push up your portfolio in the years ahead? Let's stand them side-by-side to find out.
Image source: Getty Images.
The case for CRISPR Therapeutics AG
The most advanced experimental new drug CRISPR Therapeutics has in development is CTX001, for the treatment of sickle cell disease. To help cover expenses, CRISPR has partnered with Vertex Pharmaceuticals (NASDAQ: VRTX), and the pair will split development costs and potential sales down the middle.
The CTX001 program hit a wall in the U.S. when the FDA applied a clinical hold to it earlier this year, but European study locations are expected to begin enrolling patients before the end of 2018. Enrollment will drive up CRISPR's operating expenses, which reached $67 million in the first half of the year.
CRISPR finished June with a cash balance of $320 million, then raised around $200 million in a secondary offering in September. With a relatively long runway to work, CRISPR should be able to show us whether CTX001 works as intended before it needs to tap investors again.
There's also a chance the company will be able to show us data from CTX110, a cellular cancer therapy similar to Yescarta from Gilead Sciences (NASDAQ: GILD) that has an important advantage. Gilead needs to manufacture a new batch of Yescarta for every patient, but CTX110 is intended to be a one-size-fits-all IV bag of immune cells trained to go after the same target as Yescarta.
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In a study with advanced-stage lymphoma patients that led to Yescarta's approval, 58% of those treated with the drug were in complete remission at 15.1 months. While CTX110 might have a convenience advantage, proving itself effective enough to eventually compete isn't going to be easy.
The case for Editas Medicine, Inc.
While a handful of cellular therapies in development could end up competing with CRISPR's lead candidate, Editas Medicine has its most advanced candidate, EDIT-101, aimed at a condition that doesn't get as much attention, Leber congenital amaurosis type 10 (LCA10). This inherited form of blindness is more common than all others, and there aren't any available treatments at the moment.
ProQR (NASDAQ: PRQR) is developing QR-110 to treat patients with a mutation on the same gene as EDIT-101 but in a much different manner. QR-110 would require repeat injections right in the eyes to help a mutated gene produce functional copies of the CEP290 protein, while EDIT-101 is designed to repair the gene and provide a permanent solution with a single treatment.
In October, Editas expects to file an application that will allow clinical trials with EDIT-101 to begin in the U.S., and its approval would trigger a $25 million milestone payment from Allergan (NYSE: AGN). The leading eye-care product manufacturer recently exercised its option to develop and commercialize EDIT-101 globally. In the U.S., the partners will split expenses and any eventual profits evenly.
Earlier this year, Editas expanded its partnership with Celgene (NASDAQ: CELG), and now the pair will genetically modify immune cells to recognize and attack cancer through four different programs instead of just three.
Image source: Getty Images.
Allergan and Celgene will do some of the heavy lifting once clinical trials are under way, but Editas is burning through cash right now. After losing $71 million during the first half of the year, Editas finished June with $344 million in cash. That's less than CRISPR, but it should still be enough to produce human proof-of-concept data for EDIT-101 before it's time to tap investors again.
The better buy
Several biotechs are developing sickle cell disease candidates that are years ahead of CRISPR's lead candidate, and their success could convince Vertex that CTX001 just isn't worth the effort. As for Editas, if its lead candidate works at all as intended, Allergan seems more likely to carry the EDIT-101 program through later development stages.
A lack of partners for CRISPR's cellular cancer therapies could lead to heavy expenses for programs that will have even heavier competition by the time we know if they work. Editas Medicine has the upper hand in this respect as well, through its partnership with Celgene.
To top it off, Editas Medicine's recent market cap of $984 million is 30% lower than CRISPR's at the moment. Put it all together, and Editas looks like the better gene editing stock by a mile.
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Cory Renauer owns shares of Celgene and Gilead Sciences. The Motley Fool owns shares of and recommends Celgene and Gilead Sciences. The Motley Fool owns shares of CRISPR Therapeutics. The Motley Fool recommends Editas Medicine and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.