Long Term Investing: Introduction to Crispr Technology November 2017
Pronounced "Crisp-per", CRISPRE Cas-9 refers to a revolutionary Gene Editing technique that allows for the removal or altering of a Human DNA sequence. It is versatile, precise and relatively inexpensive. It also has enormous potential in all other aspects of applied genetics. This would include pharmacological and agricultural applications. Accordingly, it has the medical, scientific and investment community very excited. The key question for Investors is: What are the time frames in terms of commercial application? And: What are the best strategies and companies to follow?
It seems that no major discovery or invention in the last 150 years has occurred without a significant lawsuit about origin and ownership. The CISPRE story is no exception. While the initial discovery has been attributed to Jennifer Doudna of the U.S. and Emmanuelle Charpentier of France an initial patent dispute with the Broad Institute and Feng Zhang has favored the Broad Institute as it applies to specific applications in humans. Since the science is extremely complex and the applications far reaching in medicine, pharmacology and agricultural engineering the legal issues will likely linger for years. Trying to predict outcomes is difficult but it appears that with respect to human applications, Feng Zhang is in a better position. What is probable, are a series of complex Shared Settlement Agreements that will allow business and research to proceed. Under such arrangements, large biomed/ pharma companies will pay royalties or licensing fees to both parties in an often still unsettled legal dispute. Although there are now many publically traded companies involved in this field it is best, as an introduction, to focus on the three most prominent companies. Following these three companies gives the best guidance as to direction on both commercial and legal issues.
Editas Medicine Inc. (NASDAQ-EDIT) is the Boston based company associated with Feng Zhang and the Broad Institute. One of their principle efforts have been on curing certain inherited retinal degenerative disorders. They have a research and development agreements with Allergan Pharmaceuticals and Juno Therapeutics. Bill Gates is an investor, hoping that gene altering techniques will destroy malaria carrying mosquitoes.
Intellia Therapeutics Inc. (NASDAQ-NTLA) is another Massachusetts based company. This one carries the prestige of Jennifer Doudna and the intellectual property of UC Berkeley. With significant development agreements with Regeneron and Novartis it is more drug development oriented. Their main efforts presently target hepatitis B and liver disease.
Crispr Therapeutics AG (NASDAQ-CRSP) is the Swiss based company associated with Emmanuelle Charpentier. They have long term development agreements with Bayer AG and Vertex Pharmaceuticals. Their main focus is on muscular dystrophy, sickle cell diseases and blood disorders including hemophilia.
All of these companies are well funded and their deals with major companies are significant. They are also all, at best, a few years away from making money. Their share prices are volatile being subject to the whims of changing future expectations, possible dilution due to cash needs and legal issues. Anyone of them could, however, carry a $ 50 Billion Market Cap in five years. With present Market Cap values of between $ 750 million and $ 1 Billion there are potential windfall profits to be made. They are all worth the risk for long term investors.
Lance Reed, Research Analyst, Kingston Trading