The market has nearly abandoned many of the biotech start-ups it funded in the excitement of the first Covid vaccines in 2021, leaving the pioneers of an elegant approach to editing genes known as base-editing in the castoff pile.
Investors shouldn’t write them off.
Beam Therapeutics
(ticker: BEAM), was the first to get rights to the technology, a less disruptive variant of the Nobel Prize-winning Crispr gene-editing approach. Its stock neared $140 in June 2021 as it targeted cancer and sickle cell disease.
Verve Therapeutics
(VERV) licensed Beam technology to prevent cardiovascular disease, and its stock once topped $76.
Now Beam goes for $20 and Verve for $9.50. Chalk it up to the market’s impatience with cash-burning biotechs that have yet to market a product.
Investors should be aware that each announced news recently, aimed at assuring investors that their clinical programs will go forward. Beam said last week that it is focusing its resources on a few programs and will trim staff. Verve said Monday that the Food and Drug Administration has granted the green light for U.S. trials of its treatment.
Most gene-editing techniques can zero in on a troublesome stretch of our DNA and knock it out by snipping the molecule’s double strands. That is the method being tested in clinical trials by Crispr pioneers like
Intellia Therapeutics
(NTLA),
Crispr Therapeutics
(CRSP), and
Editas Medicine
(EDIT) as they disable the faulty genes that cause sickle cell anemia and other inherited diseases.
Base-editing makes a gentler edit to DNA. It nicks just one of DNA’s two strands and changes a single genetic-code letter, known in the lab as a “base,” in a way that is less disruptive of our cells.
With funds from an initial public offering and from partnerships with the likes of
Pfizer
(PFE), Beam had a pipeline of programs targeting ills that ranged from cancer to hepatitis. But with the finish line of its first approval still a couple of years off—and the market less eager for biotech secondary stock offerings— Beam said on Oct. 19 that it would lay off 20% of its workforce and put programs like its hepatitis treatment on ice.
Beam said the winnowing will leave it enough cash to last into 2026. The company had $1.1 billion on its balance sheet as of June. William Blair analyst Sami Corwin expects Beam to report a loss of about $350 million this year, or $4.47 a share.
The company dosed the first patients with a base-editing fix for sickle cell in September. Like other genetic treatments for the blood disease, Beam’s repair to patients’ blood cells will take place outside the body. Data will come out in 2024, along with readouts on the first base-editing treatment for an inherited liver disorder call alpha-1 antitrypsin deficiency. Blair’s Corwin rates the stock at Buy.
Verve has already begun overseas trials of base-editing to fix genetic defects that leave some families with disastrously high cholesterol levels. But in the U.S., the FDA delayed the start of clinical trials while seeking more information on base-editing’s safety. That decision, disclosed in November 2022, sank the stock.
Monday, Verve said the FDA will let its U.S. trial begin. Its potential one-time fix for inherited high cholesterol will be the first time the FDA allows base-editing inside a patient, or in vivo.
Verve’s good news should also cheer Beam investors, wrote Corwin on Monday, because Beam aims to do in vivo base edits and will get a share of Verve sales.
A further development for Verve is imminent: Researchers will present initial data from Verve’s international clinical trials at the American Heart Association conference on Nov. 12. If the one-time treatment cuts cholesterol as effectively as marketed products such as Leqvio from
Novartis
(NVS), Repatha from
Amgen
(AMGN), or Praluent from
Regeneron,
Blair’s Corwin thinks Verve stock could triple, to more than $30. She rates it at Buy.
Write to Bill Alpert at [email protected]
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