On Dec. 8, the FDA approved the first CRISPR gene editing drug developed by Crispr Therapeutics and Vertex Pharmaceuticals to treat sickle cell and beta thalassemia blood disorders. CRSP stock sold off hard after the news became official, but that's after shares more than doubled in less than a month in the lead-up to the announcement.
The drug formerly known as exa-cel will sell under the brand name Casgevy following the approval. The decision is seen as a major milestone for biotech stocks as more gene therapy drugs come to market.
Government approval of these groundbreaking treatments could generate an unprecedented wave of medical innovation. But gene editing therapies aren't without risk, and questions remain about the safety and cost effectiveness of these experimental treatments.
CRSP Stock Plunges After Approval
Crispr Therapeutics fell sharply despite garnering regulatory approval for its groundbreaking treatment for sickle cell. CRSP stock rallied ahead of the news, but has since faded from a 15-month high reached in mid-November.
CRSP stock has been on a wild ride over the last few months. Shares soared from an Oct. 23 low of 37.55 to a high of 76.19 on Nov. 20, marking a 103% gain during that short time frame.
CRSP stock cleared a buy point of 72 on Nov. 20 after U.K. regulators signed off on the drug. But the breakout attempt failed after shares tumbled on Dec. 8. As of Dec. 12, CRSP stock was trading around 58.
VRTX stock also edged lower after FDA approval news. But shares are trying to reverse course and are looking to retake their 50-day line.
Molecular Surgery
"We're reimagining medicine to go from a pill a day type of paradigm to molecular surgery that's a one-time procedure that's a cure for life," Dr. Sam Kulkarni, CEO of Crispr Therapeutics, told IBD in a recent interview.
Eight new gene therapy drugs have been approved so far in 2023. And the windfall could be substantial, with treatments going for as much as $3.5 million. One research firm says the gene therapy market could be worth $82.2 billion by 2032.
"It's going to change how we think about the pharma market and how we think about medicine in general," Kulkarni said.
Gene therapies could theoretically cure devastating — and debilitating — genetic disorders like spinal muscular atrophy and rare blood diseases like sickle cell in one fell swoop by modifying the underlying code in our DNA.
Gene editing takes things one step further by making targeted and deliberate changes to a specific region in the genome. CRISPR, which is short for clustered regularly interspaced short palindromic repeats, is one tool for changing the sequence of DNA to correct mutations that cause disease.
Boom In Pending Gene Therapy Approvals
Advances in CRISPR technology have accelerated rapidly over the last decade. And the pipeline for potential treatments is expanding. There are currently more than 1,000 cell and gene therapy treatments in clinical development, according to data from McKinsey & Company. And 50 gene therapy drugs are slated to launch in the next few years.
Kulkarni says increases in pending FDA gene therapy approvals can be traced to the Covid crisis. "I think what the pandemic did is accelerate technology development and manufacturing in a big way," he said.
The Covid response forced the FDA to become more flexible with fast-track drug approvals. The agency also diverted more resources to handle reviews for cell and gene therapy treatments. Kulkarni says that move sparked investment and build up of critical manufacturing components within the biotech sector.
"What it also did is validate some of these vehicles for delivering these advanced drugs," Kulkarni explained. "You had more than a billion people take mRNA vaccines and that gives regulators more comfort about the safety of some of these medicines."
The biggest concern over these gene editing drugs are unintended mutations caused by off-target edits. And while CRISPR treatments have shown great promise to treat a multitude of diseases, some researchers say more time is needed to study the potential consequences of these drugs.
Sickle Cell Patient Describes 'Life Changing' Treatment
But time is not a luxury for people suffering from devastating genetic illnesses, who, because of their diagnoses, are willing to put themselves through clinical trials for these potentially game-changing treatments despite the risks.
"My quality of life was in the gutter," said Atlanta-based entrepreneur Jimi Olaghere. Olaghere, who suffers from sickle cell disease, was an early participant in the CRISPR clinical trials.
Sickle cell is a genetic defect that affects the way red blood cells deliver oxygen to the body. About 100,000 Americans suffer from the disease, which disproportionately affects people of African descent.
Casgevy is given to the patient in what's called the ex-vivo method, meaning that the gene editing takes place outside the body. Doctors remove cells taken from a person's bone marrow, make the necessary edits, and then infuse billions of modified cells back into the patient.
"I usually have this constant lingering pain that's not really a crisis, but just constant pain that's always there no matter what's going on," Olaghere said. "That was one of the first things I noticed probably two to three weeks after the infusion — that lingering pain that just always niggles was no longer there."
In an October 2023 FDA hearing, Vertex Pharmaceuticals reported that the treatment worked in 29 of 30 patients who were followed for at least 18 months without any serious short-term side effects.
Crispr Therapeutics will follow patients like Olaghere for 15 years following treatment to monitor for any side effects and off-target edits. And while exa-cel doesn't cure sickle cell, the drug aims to provide patients with a lifetime of relief from its painful symptoms.
"It's been life changing," Olaghere said. "I wouldn't be where I'm at right now if I hadn't gone through this trial three years ago."
Tapping The Gene Therapy Market
There's a lot of bullishness over how the potential approval of gene therapies could bring significant disruptions to the pharmaceutical industry.
But despite the promise of these groundbreaking treatments, skepticism remains among investors. Biotech stocks are well off 2021 highs and remain volatile. And some companies producing gene therapy drugs are also struggling to gain commercial traction.
But Crispr Therapeutics and its partner Vertex Pharmaceuticals are looking to buck the market trend. CRSP stock in particular has attracted notable investor interest and price gains late into 2023, despite recent volatility.
While Vertex and Crispr Therapeutics have yet to disclose how much Casgevy would cost, the price tag for these one-time gene therapy drugs is estimated to be in the millions. Some analysts, like those at venture capital firm Andreessen Horowitz, think the market will be willing to pay for high-cost gene therapies for the right patients.
Kulkarni says the secular shift toward cell and gene therapies will bring investors back to biotech stocks. "From a fundamental standpoint, the pace of scientific advancement has never been faster," he said. Kulkarni adds that the business models have yet to catch up with the science.
"It's taken us longer to figure out how we create a business model that still is attractive from a valuation standpoint and from a business standpoint that investors can get behind," Kulkarni explained. "As we launch these medicines and as they gain traction, I think that skepticism is going to go away."
What's Next For CRSP Stock?
While headlines are currently focused on Crispr Therapeutics' treatment for sickle cell, Kulkarni says the company is working on gene editing drugs that will target more common ailments.
"We're going after three of the biggest killers out there: heart disease, diabetes and cancers," Kularni said. He anticipates that Crispr Therapeutics will have readouts in the next 12 to 15 months that will indicate CSPR stock's progress on the cardiovascular side and diabetes side.
"That's going to define the next phase of growth for the company," Kulkarni said. He adds that there are countless potential applications of CRISPR tools that could open up a whole new world in health care.
"Only now are we seeing this powerful platform emerge where we're not just reading DNA, we're writing DNA," Kulkarni said. "The possibilities are endless. And we're just beginning that sort of secular growth in this market that's going to redefine medicine."
Follow Alexis Garcia for more stock market news on Threads at @alexisinvestors.
