Market Insight - Medicine breakthrough conquers stock market

Thanks to a breakthrough in biotechnology made by two researchers awarded the Nobel Prize in 2020, it will soon be possible to treat genetic diseases and cancer through selective gene exchange. The groundbreaking CRISPR/Cas9 method has also found interest among investors, thanks to which both Nobel Prize winners were able to set up independent companies and list them to the stock exchange, which enables us to assess development of this technology and its promising potential.

A breakthrough in the treatment of genetic diseases

In 2020, Emmanuelle Charpentier and Jennifer Doudna were awarded the Nobel Prize in Chemistry for "developing a genome-editing method" - CRISPR/Cas9 - whose mechanism was first described in 2012. The above technique of genetic engineering has enabled scientists to manipulate the genes of not only animals and humans, but also plants, which significantly broadens the potential spectrum of using this method also in business terms. Both Nobel laureates founded companies called CRISPR Therapeutics and Intellia Therapeutics. Both companies have already produced drugs approved for trading by US FDA regulators. The largest companies in the pharmaceutical industry, such as Regeneron or Bayer, co-create CRISPR and take up the challenge of combating so far incurable and deadly diseases. Implementation of foreign DNA into the selected part ofthe genome allows the "replace" the mutated gene with the correct one. This method is already used in the treatment of monogenetic diseases such as sickle cell anemia, cystic fibrosis or Duchenne muscular dystrophy. Thanks to the CRISPR/Cas9 method, first described 10 years ago, businesses from the food industry are able to modify their crops in a different way compared to genetically modified organisms (GMOs).

What is CRISPR/Cas9 and how does genome editing work?

CRISPR-Cas9 was adapted from a naturally occurring genome editing system that bacteria use as an immune defense. Thanks to the use of the Cas9 enzyme scientists are able to "cut out" specific DNA fragments, e.g. those containing an unfavorable genetic variant, and replace them with the healthy one. The Cas9 follows the guide RNA to the same location in the DNA sequence and makes a cut across both strands of the DNA. Although the cell is able to reattach such broken DNA fragments, this process is imperfect and leads to numerous changes in the genome and, consequently, to the switching off of the gene present at this place. Thanks to this, the CRISPR technology enables the incorporation of another piece of DNA in the indicated place. This method allows to treat not only diseases that are caused by the abnormal version of the gene, which in turn lead to production of a defective protein, but also those caused by the lack of a protein necessary for the proper functioning of the organism.

CRISPR market size and forecasts for the coming years

The global CRISPR technology market was valued at $2.2 billion in 2021. The projected CAGR (average annual growth rate) in the period from 2021 to 2030 is close to 20%. The global CRISPR technology market is expected to reach $11.6 billion by 2030.

https://www.sphericalinsights.com/reports/crispr-technology-market

The largest and fastest growing markets

According to forecasts, Asia and the Pacific will be the most dynamically developing markets in terms of CRISPR technology. Among all regions, North America emerged as the largest market for CRISPR technology, with a share of approximately 34.67% and 2,251.21 million in revenue in 2021. The CRISPR market in the North America region is projected to experience significant growth over the forecast period due to the multiple benefits of using CRISPR technology and numerous technological innovations and product approvals as well as legislation implemented by the government.

https://www.grandviewresearch.com/industry-analysis/crispr-associated-cas-genes-market

Source: US Census Bureau, Illumina, NHGRI 2019

In the 1990s, the cost of the human genome sequencing process was expensive, costing $2.7 billion and taking nearly 13 years. Today, the costs are close to $700 and the process takes only a few days. Improving statistics creates opportunities to implement new solutions and research data along with the development of an optimal business model. In 2020, thanks to the editing of the CRISPR-Cas9 genes, it was possible to eliminate a defective genetic mutation in the human body for the first time.

5 interesting companies that use the CRISPR method

CRISPR Therapeutics (CRSP.US)

The company is the world's leading gene editor and was founded in 2012 by Emmanuelle Charpentier, the winner of the 2020 Nobel Prize in Chemistry, and Rodger Novak. The company has partnered with with Bayer and Vertex. Cooperation with Bayer resulted in the creation of a joint venture company - Casebia Therapeutics. Bayer committed to finance the company's operations with USD 300 million over a period of 5 years. CRISPR Therapeutics owns 50% of Casebia. The company focuses on the treatment of blindness, heart defects and blood diseases using the Cas-9 method. The company has already implemented the FDA (Federal Drug Administration) approved drug CTX001 which is used for treatment of beta thalassemia and sickle cell disease. In order to develop CTX001 drug, company established cooperation with Vertex, which acquired a 60% stake in the research program and invested USD 900 million. The estimated value of the program to combat both diseases reached approximately USD 9 billion. CRISPR Therapeutics appears to have a well-diversified and complete model of applied methods thanks to the use of two gene-editing methods known as LVP and AAV and the LNP technology licensed from the Massachusetts Institute of Technology. The company, together with StrideBio, is developing solutions to improve the AAV method and ramp up production.

Source: xStation5

Intellia Therapeutics (NTLA.US)

Intellia was founded by Nessan Bermingham and Jennifer Doudna, 2020 Nobel Prize winner. The company has entered into partnerships with Novartis and Regeneron. The shareholders include BlackRock, Vanguard and ArkInvest investment funds. The most promising program is NTLA-2001, which aims to reduce the concentration of transthyretin amyloidosis. The program has already provided the company with nearly USD 700 million in proceeds. Intellia implements it in cooperation with Regeneron. Intellia is working with Novartis to develop NTLA-2002 to combat hereditary subcutaneous edema. The companies are also working on the OTQ 923 project aimed at finding a cure for sickle cell disease. The program is estimated to generate $5 billion to $6 billion in revenue. Intellia has also partnered with Cellex and Blackstone in collaboration where it focuses on the so-called universal allogeneic therapies. Intellia operates in the US market. As the only company in the industry, it has a program to fight acute leukemia, NTLA-5001. The potential value of revenues on the US market alone is estimated at USD 6 to 8 billion. Similar to CRISPR Therapeutics, Intellia uses LNP and AAV methods. Together with Regeneron, the company is also exploring a 'hybrid' LNP-AAV delivery method that could potentially gain an advantage.

Source: xStation5

Beam Therapeutics (BEAM.US)

The company says its approach offers several advantages over other CRISPR techniques. These include the ability to precisely target a specific gene sequence and edit genes without unintended consequences, such as genome rearrangements on a larger than intended scale. Beam is not yet as advanced as companies in the industry focused on CRISPR. The company is in the process of introducing prime candidate BEAM-101 into Phase 1/2 clinical trials to combat sickle cell disease. It also runs preclinical programs using database editing to treat beta thalassemia, leukemia and several other genetic diseases. The capitalization of the company is at a similar level compared to other CRISPR companies with much more advanced production lines. However, the long-term potential of Beam technology may justify current high valuation.

Source: xStation5

Editas Medicine (EDIT.US)

Editas Medicine is a leader in developing therapies for rare eye diseases based on CRISPR gene editing technology. In September 2021, the company announced the preliminary results from the Phase 1/2 BRILLIANCE trial of EDIT-101, used for treatment of Leber congenital amaurosis 10 (LCA10). Investors were disappointed with this data. However, it is possible that further testing of higher doses of the CRISPR-based therapy could improve results in the future. Editas also has another candidate in the clinical phase, EDIT-301. Like the major Beam and CRISPR Therapeutics programs, EDIT-301 targets sickle cell disease. However, Editas believes that its approach of editing the HBG1 and HBG2 genes could provide an advantage over rivals that edit the BCL11A gene. The company hopes to bring EDIT-301 into clinical trials as a treatment for transfusion-dependent beta thalassemia. Over the past few years, Editas has generally been seen as one of the leading producers of CRISPR-focused drugs. However, mixed preliminary results for EDIT-101 left Editas with a much smaller market capitalization than other early winners, including CRISPR Therapeutics and Intellia Therapeutics.

Source: xStation5

Sangamo Therapeutics (SGMO.US)

Sangamo was founded in 1995 as Sangamo BioSciences, Inc. and focused on researching new genome editing technologies. The company has partnered with Pfizer to develop treatments for hemophilia A and ALS. Sangamo Therapeutics is the only company focused solely on the development of zinc finger nucleases (ZFNs) as a genetic engineering tool. The company uses the tool in both ex vivo and in vivo gene editing therapies, as well as a genome regulation tool. The company currently sponsors clinical trials in sickle cell anemia and beta thalassemia where ZFNs are used for gene editing. The company has established partnerships with many leading companies, such as Pfizer, Biogen, Novartis, Takeda, Sanofi and Kite Pharma.

Source: xStation5