Editas Medicine currently trades at an enterprise value of just $561 million, but its IP portfolio alone is worth billions. This stock traded at over $80/share 2 years ago and is now under $9/share, however the reasons for buying then are just as strong now. It’s EDIT-301 has shown tremendous progress in early clinical testing.
Therapie$ for rare di$ea$e$ ba$ed on CRISPR gene editing technology
SHARE DATA, MARKETCAP, CORPORATE INFO:
Editas Medicine, Inc.
Stock symbol EDIT
Share Price $8.10
Market Cap $556 Million
Shares Outstanding 68.76 Million
Company website: https://ir.editasmedicine.com
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Investment Thesis: Editas Medicine currently trades at an enterprise value of just $561 million, but its IP portfolio alone is worth billions. This stock traded at over $80/share 2 years ago and is now under $9/share, however the reasons for buying then are just as strong now. It’s EDIT-301 has shown tremendous progress in early clinical testing. Also important to note is that the early data from EDIT-301 is arguably better than the early data that CRISPR Therapeutics presented for its own sickle cell/beta thalassemia therapy. And CRISPR Therapeutics is in the process of submitting a package to request FDA approval for that therapy. Editas’ cash runway extends into 2025 and the most likely outcome is an acquisition between now and then. Many investors initially took a position in EDIT because of the incredible potential of EDIT-101 to cure a genetic form a blindness and the company’s foundational patent holdings around CRISPR-Cas9 genetic editing. EDIT-101 proved to be effective, but only in a small subset of LCA-10 patients with a specific genetic mutation. As a result, the further pursuit of that therapy was not commercially viable from a return-on-investment perspective. Interstingly, the fact that it was effective, even if on a small subset of patients, actually proved that CRISPR-Cas9 can be used in vivo — which was the first of its kind in a clinical trial – and a big deal in this important niche sector. What has always been the case is that the foundational patents alone make this company worth billions. The potential of the future royalties from the patents has always been larger than what Editas could have made from EDIT-101. As I said at the opening… “nothing at all has changed”. Note that both CRISPR Therapeutics and Intellia Therapeutics must license Editas’ IP around CRISPR-Cas9 before they can commercialize their lead therapies — those deals will provide a strong revenue stream for Editas Medicine.
Description of the Company: Editas Medicine, Inc., a clinical stage genome editing company, focuses on developing transformative genomic medicines to treat a range of serious diseases. It develops a proprietary gene editing platform based on CRISPR technology. The company develops EDIT-101, which is in Phase 1/2 clinical trial for Leber Congenital Amaurosis 10 that leads to inherited childhood blindness. It also develops EDIT-102 for the treatment of Usher Syndrome 2A, which is a form of retinitis pigmentosa that also includes hearing loss; autosomal dominant retinitis pigmentosa, a progressive form of retinal degeneration; and EDIT-301 to treat sickle cell disease and transfusion-dependent beta-thalassemia. In addition, the company is developing gene-edited Natural Killer cell medicines to treat solid tumor cancers; alpha-beta T cells for multiple cancers; and gamma delta T cell therapies to treat cancer, as well as has an early discovery program to develop a therapy to treat a neurological disease. It has a research collaboration with Juno Therapeutics, Inc. to develop engineered T cells for cancer; strategic alliance and option agreement with Allergan Pharmaceuticals International Limited to discover, develop, and commercialize new gene editing medicines for a range of ocular disorders; and research collaboration with Asklepios BioPharmaceutical, Inc. to develop a therapy to treat a neurological disease, as well as research collaboration with AskBio.
Recent news regarding restructuring: January 9, 2023 “Editas Medicine Announces Strategic Updates And Portfolio Reprioritization”, in-short, Editas announced that it would lay off about 20% of its 1,800-person workforce this week. Management has decided to discontinue the development of its inherited retinal disease (IRD) programs, including EDIT-101 and EDIT-103. It’s also halting investment into research involving induced pluripotent stem cell-derived (iPSC) natural killer cell programs. This included EDIT-202. This comes as part of a strategy to focus resources on EDIT-301, Editas’ clinical program for the treatment of severe sickle cell disease and transfusion-dependent beta-thalassemia, a blood disorder that reduces the production of hemoglobin.
Editas also announced that its Chief Scientific Officer Mark Shearman is stepping down. Additionally, it’s restructuring its research organizations into two divisions:
- Drug Discovery for in vivotarget identification, therapeutic asset creation, and translational research.
- Advanced Technology for in vivotargeted integration and delivery.
Important to note is that Editas will continue advancing its cellular therapies through various partnerships. This includes its alpha-beta T-cell therapies with Bristol-Myers Squibb.
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