CRISPR / CAS 9 : THE NEW HOPE OF THE GENE EDITING INDUSTRY

During the last decade, the biotech sector has been a tremendous land of opportunity for a majority of investors despite some major setbacks such as Theranos or Turing Pharmaceuticals.

However as it has been pointed out by numerous economical analysts on the street, since the beginning of the year all the majors biotechnology funds have pursued a complex downtrend after failing to bounce back to 2018 highs in the first quarter. In this sense, it appears interesting to focus on what appears to be the next big thing in the biotech sector and take advantage of this bear market to start building a position in the gene editing industry through companies such as Intellia Therapeutics Inc (NTLA) , CRISPR Therapeutics AG (CRSP) or Editas Medecine Inc (EDIT)

But first, whas it gene editing ?

What we usually call gene editing is a genetic engineering process aiming to modify with great accuracy a cell genome in order to :

• disable a gene
• induce a particular mutation
• correct a specific mutation
• insert a new gene
• ... 
  

Functionning principles :

Through the use of modified nucleases also known as "molecular scissors", we cut the DNA on a pre-determined location of the genome. Then, once we broke the DNA, using the homologous recombination process,  we can easily modify it by simply introducing a new DNA strand containing the desired mutation and presenting at its extremities the corresponding sequences to our two broken pieces of original DNA.

CRISPR Cas 9

Fine tuned by the research team of Emmanuelle Charpentier in 2011, this method focus on improving the efficiency of the known gene editing methodologies already in used such as TALENs and  ZFN. Indeed, researchers realized that instead of using a proteine in order to locate the DNA spot to cut it was possible to use an RNA coupled with a CAS nuclease (usually of type 9) and achieve obtain the same results faster, with a better overall efficiency and a less expensive process.

This is why, CRISPR- Cas 9 is considered by many among the sector as a game changing process for the decades to come due to its potential to pave the way for companies to start using gene editing in their industrial process in order to create new markets in the food industry, healthcare or bioinformatics. Indeed, considering the food industry, with the use of CRISPR, it will be possible for major companies, to create new crops more resilient to parasite, confine the growth of invading species or even create new enhanced species more in line with the need of the industry. Furthermore, in healthcare, it could very well spell the end of our current medecine and lead us to a new era centered around gene therapy unleashing as such a whole new market for companies and investors both in healthcare and bioinformatics. 

Current state of the market

In the current state of the market, given that this technology is still pretty new and that most project are still in development, there are not a lot of companies in which to invest on the market to directly take a position on this new process. Indeed, there are only three companies on the NASDAQ specialized on this segment :

• CRISPR Therapeutics ( CRSP ) : recently expanded its collaboration agreement to include new areas with Vertex Phamaceuticals ( VRTX ) and currently in phase 1 clinical studies for its lead candidate CTX001 which targets blood disease such as beta thalasemmia and sickle cell disease

• Editas Medecine ( EDIT ) : currently developping EDIT-101 its lead candidate targeting treatment of Leba congenital type 10 which is the leading cause of genetic blindness.

• Intellia Therapeutics : currently developping its lead candidate targeting transthyretin amyloidosis in order to present it to phase 1 at the horizon 2020.

These stocks being quite cheap now aspecially with the bear trend of the last quarter, it appears interesting to take a position on it in order to gain exposure to this sector.

However, it is important to bear in mind that this sector is more in adequation with a long term strategy at a 5 year horizon in order to profit from the development of the technology in the year to come and also of the expansion of this technology to other sectors which will logically attracts the spotlights of the mainstream financial media and with it a lot of new cash eager to invest in the new hot stocks.

P.S. Even if those 3 companies inform investors during the past weeks that the products they are currently developping are not causing any increase in risk of cancer, it is important to make sure to keep posted about recents development in order to readjust the strategy in case of any significant change given the 2018 studies report highligting in certain cases a potential increase risk possibility of cancer when using Crispr/Cas 9 to specifically perform gene correction.