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Is Genome Editing the Next Biotech Breakthrough?

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One of the most promising and exciting healthcare innovations in decades is genomic editing technology using CRISPR technology to repair defective genetic material that causes disease.  CRISPR is an acronym for “Clustered Regularly Interspaced Short Palindromic Repeats.”  CRISPR research is an offshoot of the Human Genome Project which mapped all the genes in the human body in 2003. Armed with the knowledge of how genetic material is supposed to be structured, researchers then endeavored to devise ways to “fix” it when it is incorrect.

A breakthrough came from the field of bacteria research. Certain bacteria have developed an immune response in which they retain a piece of DNA of an invading virus as a reminder, and then if that DNA is encountered again, the bacteria use CRISPR to alter it, rendering the virus innocuous.

Thousands of scientists are currently researching ways to use this same mechanism to alter human DNA but “cutting out” defective portions of the sequence and replacing them with the correct code.  As many as 6,000 diseases are caused by genetic factors, including Alzheimer’s, hemophilia, sickle cell disease, ALS and many cancers.  The ability to identify and fix faulty genes could make many of these diseases effectively curable.

Research has delivered several methods to use CRISPR to target the genetic defects that cause specific diseases, but the most promising at this point uses an enzyme called Cas9 to deliver CRISPR to affected cells.  Three companies currently have plans to do studies this year on human subjects using CRISPR Cas9 to address disease.

CRISPR Therapeutics (CRSP) has been one of the best performing stocks in the U.S. in 2018, up nearly 200% YTD. Though already on the radar of traders and analysts, the stock got additional boosts from a 60 Minutes piece on the technology in April and favorable response to the company’s presentation at a Merrill Lynch Healthcare Conference last week.

CRSP is about to begin trials of CRISPR Cas9 in the treatment of two related genetic blood disorders in humans, B-thalassemia and Sickle Cells Disease.  The  approach, internally named CTX001, has had a Clinical Trial Application (CTA) granted for B-thalassemia study in Europe and has an Investigational New Drug (IND) application pending for study on Sickle Cell Disease in the U.S.

Though CRSP’s potential therapies are still in the developmental stages and the company has yet to turn a profit, promising results in animal trials and joint ventures with Vertex Pharmaceuticals (VRTX) and Casebia Therapeutics have analysts turning more bullish on the potential of these technologies to one day turn into potential blockbuster drugs.  CRSP is a Zacks Rank #1 (Strong Buy).

Also focused on genetic therapies using the CRISPR Cas9 system, Intellia Therapeutics (NTLA) recently announced that its first cell-therapy target will be acute myeloid leukemia and other potential hematological malignancies as well as solid tumors.

Intellia has a diversified strategy toward selecting disease targets using various types of genetic edits and using both in vivo and ex vivo delivery, insulating the company from the possibility of disappointing results in specific categories.
Intellia has partnered with Regeneron (REGN) for in vivo delivery, specifically for liver disease and Novartis (NVS) for ex vivo delivery to treat various cancers.

Three analyst upward revisions in the past 30 days for both quarterly and 2018 earnings suggest increasing optimism about the future of NTLA’s CRISPR therapies and the shares are up 34% in 2018, versus a return of -10% for the genetic therapies industry as a whole.  NTLA is a Zacks Rank #3 (Hold).

Cambridge, MA based Editas Medicine, Inc (EDIT) is a discovery phase company applying CRISPR Csa9 genetic therapies to the treatment of Leber Congenital Amaurosis – a degenerative and debilitating eye disease.  

Results from non-human primate trials were encouraging, with test subject tolerating the injected treatment and with immunity to bacterial infections not impacting the pharmacological activities of the drug.  (Immuno-response destroying the active properties of the drugs is sometimes a concern with CRISPR Cas9 therapies.)

Editas also has drugs in the pipeline to treat cancer, muscular dystrophy and cystic fibrosis.

The company is bolstered by a strong balance sheet with $329 million in cash and equivalents and has thus far retained commercial rights to all but one of it’s pipeline programs. EDIT is a Zacks Rank #2 (Buy).

Obviously, investing in development-stage companies carries significant risk and should only be a small part of a diversified strategy, but for real home-run potential, Genetic Editing is an extremely promising sector.

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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
Novartis AG (NVS) : Free Stock Analysis Report
Intellia Therapeutics, Inc. (NTLA) : Free Stock Analysis Report
Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report
CRISPR THERAPTC (CRSP) : Free Stock Analysis Report
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