By Marek Poszepczynski and Ailsa Craig, co-investment managers of the International Biotechnology Trust
Gene editing has made headlines in recent weeks, as the revolutionary technology has made breakthrough progress in treating serious genetic diseases and shown promising signs of blocking viral infections – such as Covid-19.
For example, US biotech firm Intellia Therapeutics announced the first successful treatment of human patients suffering from a serious genetic disease using CRISPR gene therapy.
CRISPR technology is based upon a naturally occurring ancient form of protection against viruses found in bacteria. This gene editing technology has only recently been leveraged by science, but the potential lifesaving applications are myriad. Gene editing could notably help treat some of the world’s most complex genetic disorders that are currently without cure, including both inherited genetic disorders and acquired diseases, such as cancer, which come from genetic mutations, and we believe the latest discoveries are only the first in a series of many more to come.
Gene editing will bring about a step change in drug development and open the doors to a new world of investment opportunities, which will continue to grow as the technology is refined and gains in prominence. We expect these developments to trigger a flurry of activity in the biotechnology sector, which investors will not want to miss.
What is CRISPR?
The technology in question is called CRISPR and stands for ‘clustered regularly interspaced short palindromic repeats’ – a family of DNA sequences found in bacteria. These bacterial genes act as natural a defence mechanism against invading viruses, using in-built CRISPR to snip out and retain parts of an invading virus to help them recognise and defend against it if it attacks again. The CRISPR genes produce a protein called Cas9, which acts as a ‘molecular scissor’ able to cut the invading genetic material at a precise point, silencing the virus and blocking replications.
Since discovering the existence of CRISPR, scientists have found a way of exploiting it to fight debilitating diseases caused by genetic malfunctions. The disease targeted by Intellia Therapeutics is amyloidosis, where a toxic protein called TTR builds up in a patient causing heart and neurological damage. Current approved treatments (such as patisiran (Alnylam), inotersen (Ionis) and tafamidis (Pfizer) attempt to silence, correct or destroy this protein. Instead, the gene-editing approach stops the formation of the protein altogether, using these natural scissors discovered in microbes.
However, CRISPR treatments remain in the early stages of testing. Intellia only just released landmark data from clinical trials in humans. While the trial showed a dramatic reduction in the toxic protein levels in humans with minimal side effects, it will be crucial to continue collecting data on this treatment to ensure the approach is safe and effective over the long term – as gene modifications are non-reversable.
Poised for take-off
While drug development is a long and rigorous process, and we are still years away from administering an approved CRISPR drug to patients, there is already a large and growing market of companies looking to tap the unexploited potential of CRISPR.
Often, promising emerging technologies such as CRISPR are conceived in universities. Early-stage companies are then formed to bring these ideas to fruition, with the support of private investors. There are now a multitude of small companies each working on bringing to market different CRISPR applications.
We are also on the cusp of the next step, which is for these small companies to grow into established biotech firms or be acquired by bigger name pharmaceutical groups. When a disruptive technology such as CRISPR is clinically validated, this often leads to a flurry of business development activity in the industry. Typically, larger cash generating companies swoop in, either to purchase the licensing rights to a drug or to acquire the companies responsible for the innovations.
There is a read-across to other companies working in similar areas which might also benefit from the recent success of Intellia many related companies including Crispr Therapeutics (currently leading with a CRISPR program targeting Beta-Thalassemia and Sickle Cell disease), Beam (currently working on technologies to enable gene-editing in eyes, liver and brain), Bluebird (currently focussing on a devastating inherited progressive neurological disorder called Cerebral adrenoleukodystrophy (ALD)) and Editas (currently focussing on a type of inherited progressive sight loss called Leber Congenital Amaurosis). The range of other conditions that these and other companies are also addressing is astonishingly wide
As CRISPR technology takes hold and becomes an approved method of treatment, the companies harnessing its potential could reap a proportion of the global pharmaceutical market.
Investors can capitalise on this growth by investing at different stages of the drug development cycle. For example, at International Biotechnology Trust we have exposure to CRISPR through our investment in Regeneron, the established US mid-cap company that collaborated with Intellia to fund the development of the amyloidosis treatment.
We also hold a position in Swiss-American start-up CRISPR Therapeutics, a smaller technology focused company.
By holding a variety of companies using CRISPR to tackle genetically driven diseases at different stages in the innovation cycle, we are able to diversify the trust’s risk exposure – mitigating the risks related to drug development.
Development stage companies such as CRISPR Therapeutics are considered high risk, while dependable profitable companies like Regeneron offer a less volatile option. We also look for revenue growth opportunities – companies with an approved and launched product but not yet turning a profit – as we believe these are poised to become the next generation of successful, profitable companies, xample of these include Seagen and Horizon Therapeutics.