How can we help?
Avoid blind spots in your market. Get the insights you need to accelerate innovation.
Two papers published by Novartis and Karolinska Institute that warn of potential cancer risks associated with CRISPR-Cas9 editing sent share prices of CRISPR Therapeutics (CRSP, -17.4%), Editas Medicine (EDIT, -11.1%), and Intellia Therapeutics (NTLA, -13.6%) tumbling Monday morning.
The studies found that editing efficiency of CRISPR-Cas9 may rely on dysfunction of a pathway critical for cancer prevention. In other words, successful CRISPR-Cas9 editing may in part rely on a cell being tumor-prone. Tumor protein 53 is encoded by P53, a tumor suppressor gene found to be mutated in 40-50% of all ovarian, colorectal, head and neck, and lung cancers, and 25% of breast cancers.
The p53 protein works by triggering DNA repair or cell apoptosis when damaged or mutated DNA is found in a cell. The studies found that CRISPR-Cas9 applications relying on homologous recombination from a donor template for mutation repair were highly efficient due to selection against cells with a wild-type (i.e., functional) P53 gene. By successfully incorporating edits into cells with a dysfunctional P53 gene and less successfully editing or inducing apoptosis in cells with wild-type P53, the CRISPR-Cas9 system may selectively propagate cancer-prone cells.
The share price declines imply that the space is likely still occupied by speculative investors with limited technical knowledge of CRISPR technologies, representing a potential opportunity for aggressive investors to increase their holdings in CRISPR companies:
(1) The studies’ findings are limited to the cell types in which they were performed (human pluripotent stem cells and human retinal pigment epithelial cells) and may not translate to CRISPR-Cas9 function in other cell types
(2) Leading clinical candidates for the “Big 3” players (CRISPR Therapeutics’ CTX001 for beta thalassemia / sickle cell disease, Editas Medicine’s EDIT-101 for Leber congentinal amaurosis, and Intellia Therapeutics’ candidate for transthyretin amyloidosis) utilize the non-homologous end-joining (NHEJ) mechanism for gene knockout. NHEJ simply disrupts the target gene rather than using homology-directed repair to replace incorrect base pairs with the correct ones. While the published studies have linked CRISPR homology-directed repair to selection against p53-functional cells, NHEJ-based approaches can disrupt the target gene in the presence of active p53. Thus, selective propagation of p53-dysfunctional cells is unlikely to occur and threaten the safety or efficacy of these first-wave therapies
(3) We are beginning to see a pattern of dips and rebounds in this genomics market space triggered by headline scares without sufficient scientific validation / reproduction of results (January 2018, March 2018) and more recently, based on an FDA hold on CRISPR Therapeutics’ CTX001 trial, despite lack of known technological concerns with the technology and being on-track for launching the trial in Europe
Even though the Nature studies’ findings have limited direct implications for near-term commercialization of CRISPR-based therapies and the genomics market, shareholders have continued to divest throughout the week. This follows a pattern of knee-jerk market reactions to articles and findings that stir investors’ fears about the novel technology’s potential off-target effects and unforeseen consequences.
As CRISPR research continues to improve our knowledge of the technology’s capabilities and raise potential adverse effects in therapeutic use, we will inevitably see continued volatility in these three major stocks. However, savvy investors should evaluate their positions based on assessments of the long-term strategies of companies in the genomics market space and thorough diligence on the merits of the technical claims driving the fluctuations. If the market continues to follow a pattern of reflexive divestment without careful analysis of novel findings, we are sure to see a roller coaster of share prices over the next few years as CRISPR Therapeutics and its competitors launch their clinical trials, creating opportunities for the savvy investor to buy dips and sell peaks.
Interested in learning more about the CRISPR space and the genomics market? Check out our takeaways from CRISPRcon 2018, CRISPR strategy blog post, CRISPR Market Pulse tool, and connect with us on LinkedIn.
Chris Lew is a Senior Analyst at DeciBio interested in innovative genomic and health technologies and their impact on population health. He has experience developing go-to-market strategies, evaluating market and technology opportunities, and supporting commercial due diligence for companies in the NGS, CRISPR, immuno-oncology, and clinical decision support spaces. Connect with him on LinkedIn.
Contact us for more information about DeciBio’s Competitive Intelligence (CI) tools, CRISPR Discovery Portal, or other market intelligence products.