The CRISPR gene editing system has been one of the most fascinating subsectors of biotech ever since the first CRISPR companies went public not long ago. Up until late August though, it was all preclinical and theoretical. But back on August 27th, CRISPR Therapeutics (CRSP) and Vertex Pharmaceuticals (VRTX) made history.
The two companies have become the first commercial sponsors of a human clinical trial for a CRISPR gene-editing system, giving investors in this speculative arena something substantial to chew on. The groundbreaking trial, enrolling 30 patients at a single hospital in Regensburg, Germany, aims to treat a genetic blood disorder called β-thalassemia in a rather unique way. β-thalassemia is a blood disorder where a patient's genes code for a defective type of hemoglobin, and depending on the type of mutation, the disease can necessitate lifelong blood transfusions, wrought with complications, as well as the surgical removal of an engorged spleen.
How are CRISPR and Vertex trying to treat this condition? In a counterintuitive way. Namely by fighting fire with fire, or in this case, fighting genetic disorder with genetic disorder. β-thalassemia is caused by genetic mutations, and the goal of this treatment is to introduce a second genetic mutation into the patient's genome that causes a naturally-occurring condition called Hereditary Persistence of Fetal Hemoglobin, or HPFH. HPFH is benign, asymptomatic, and requires no treatment. The only difference between those with HPFH and those without is the type of hemoglobin they produce. HPFH patients produce fetal hemoglobin, while normal people produce adult hemoglobin. Both hemoglobins are equally effective.
So what? Why would CRISPR and Vertex "infect" people with another genetic disease? Because fetal hemoglobin, the type of hemoglobin that those with HPFH produce, is relatively unaffected by β-thalassemia gene mutations. Meaning, patients with both β-thalassemia and HPFH have much less severe symptoms associated with β-thalassemia.
But let's deepen the question down to a more basic level. Why should the approach to correcting a genetic mutation be introducing another? If you have a CRISPR gene-editing system, why not just use it to correct the actual mutation that is causing the problem, rather than introducing a new mutation that just happens to alleviate the symptoms produced by the first one? The whole approach seems rather oblique.
The answer is that CRISPR is to biology as nuclear engineering is to physics. Nuclear engineering, of course, is dangerous and potentially explosive. Mess around with the nucleus of an atom and if you do anything wrong you can end up with a Chernobyl or Fukushima. CRISPR gets down to the nucleus of biology so to speak, the actual instructions that code for life, and changes them. As this is a brand new technology altering the very code of life itself, and that scientists do not yet have sufficient experience in controlling and directing it with perfect precision, the first priority, as per the Hippocratic Oath, is to Do No Harm.
The mutation that causes HPFH is known to be a specific point mutation or deletion out of only a handful of possibilities. This means that a single DNA base pair is incorrect or missing in HPFH carriers, and there aren't many variations in the type of mutations that can cause it. β-thalassemia itself, however, can be caused by single point mutations but also by transcriptional mutations in RNA that reads and transcribes the genetic code or even errors that occur post-transcription. It would be impossible, or at the least extremely difficult given the scant amount of CRISPR engineering experience even the elite in the field has, to develop a single treatment that would correct β-thalassemia. There are simply too many different forms of genetic errors at entirely different stages in gene translation that can cause it. From a microbiological standpoint then, introducing HPFH by introducing a single point mutation is much simpler and serves as a sort of genetic bypass surgery for β-thalassemia.
Preclinical data presented last year demonstrated that transplanted cells in mice persisted at 16 weeks and that 90% of stem cells responsible for producing hemoglobin were converted genetically to the new HPFH form. The transplanted cells were also able to produce new generations of edited cells as well.
Data for this first clinical trial is anticipated in 2021, with the primary endpoint being the proportion of subjects who have reduced amounts of blood transfusions for at least six months. It will likely be the first human trial data on the CRISPR technique ever reported and will certainly get lots of attention, not least of which will be from investors.
The risk, as we have seen with this very same treatment for sickle cell disease recently, is that the FDA is unpredictable with new technologies like this and can issue a clinical hold for any reason. CRISPR Therapeutics fell 15% on the back of that news on sickle cell (see chart below), though nobody but company insiders know why a hold was issued in the first place.
As one Seeking Alpha author Marty Chilberg aptly put it back in June, Beware of Articles Minimizing Clinical Hold Risk. Downside this time may be more than 15%, as it would establish a pattern of clinical holds against CRISPR trials, perhaps as much as 30%.
Investors willing to take the risk of another clinical hold from the FDA could be rewarded ultimately by the time data are published. There is no imminent cash risk right now, as CRISPR has $320M in cash on hand, which should be enough to sustain it for the next 4 to 5 years.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.