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Most shares in the biotechnology sector have suffered a near continuous downtrend since March 2021. That peak came much earlier than a more recent peak in major indices like the S&P 500 and Nasdaq. Perhaps no subsection of biotech has been hit harder than companies focused on gene editing – particularly those working with clustered regularly interspaced short palindromic repeats (CRISPR) treatments and associated genomic therapies.
Just this year to date, the ARK Genomic Revolution ETF (ARKG) has declined nearly -50%, a steeper decline than the -39% fall in the broader SPDR S&P Biotech ETF (XBI). However, several new developments in genomics research may be set to revitalize interest in battered biotech stocks.
As BioPharmaDive reports, Verve Therapeutics, a gene editing company vying to develop a one-time treatment for cardiovascular disease via base editing (VERVE-101), has received regulatory clearance to begin its first study in humans in New Zealand. This will be significant as just the third inside-the-body gene editing treatment to enter human trials, and a first for base editing.
It was just over a year ago that MRP covered new data from Verve showing its potential treatment for heart disease led to durable reductions in both PCSK9 protein and LDL cholesterol levels in monkeys, which was a significant milestone in its preparations for human testing. With just one infusion, the therapy had 63% frequency at editing the PCSK9 gene in primates. The one-time treatment will hopefully generate significant price savings versus comparable therapies and inhibitors for PCSK9; the latter of which can cost patients as much as $5,850 per year in the US.
Base editing can be described as a new dimension of CRISPR/Cas-mediated precise editing to generate single-nucleotide changes in DNA or RNA without utilizing double-strand breaks and homology-directed repair. Each gene’s code uses the four nucleotide bases of DNA: adenine (A), cytosine (C), guanine (G) and thymine (T). As Labiotech.eu writes, most pathogenic mutations that cause human disease are single nucleotide polymorphisms that only require a single nucleotide change to correct the mutation. The base editor manipulates genes by binding to DNA and replacing one nucleotide with another.
In our early reporting on CRISPR base editing in 2020, we noted base editors were already available to address about 60% of all known genetic diseases – potentially more than 15,000 inherited disorders — caused by a mutation in only one nucleotide. Human trials will be a giant step toward unlocking this huge potential.
As for Verve’s new treatment, Singularity Hub notes that we know one major cause of heart attacks – high cholesterol levels, particularly a version called LDL-C (Low-density lipoprotein cholesterol). We also know several major genes that control its level and, most importantly, we know the DNA letter swap that should drastically lower LDL-C and in turn throttle the risk of heart attacks. VERVE-101 aims to leverage that “swap” and turn off PCSK9 forever.
Other recent developments in CRISPR have focused on editing genes that can predispose people to certain detrimental behaviors, addiction, and resulting mental health disorders. In particular, researchers from the University of Illinois Chicago (UIC) have shown CRISPR-dCas9 gene editing may be utilized to treat anxiety and alcoholism in adults who were exposed to binge drinking in their adolescence. In prior research, the UIC team found that binge drinking in adolescence alters brain chemistry at the enhancer region of the ARC gene – which regulates synaptic strength and plasticity – and decreases ARC expression in the amygdala of both rodents and humans. This epigenetic reprogramming of the ARC gene in the brain’s emotion and memory center contributes to a predisposition to anxiety and alcohol use disorder in adulthood.
In the new study, published by Science Advances, the researchers show that this epigenetic reprogramming, which persists throughout life, actually can be reversed with gene editing. When dCas9 was used to promote acetylation, a process that loosens chromatin and allows transcription factors to bind to the DNA, ARC gene expression normalized among rats that were exposed to alcohol at a young age. Furthermore, the indicators of anxiety and alcohol consumption decreased.
Even with so much activity in new gene therapies and genomic research, share prices in the space have continued to collapse, which has also begun spoiling a previously lucrative IPO market. With those factors in mind, mergers and acquisitions (M&A) may become more preferable among smaller biotech players.
As MRP noted earlier this month, a new wave of M&A in biotech and pharma may be on the horizon. Jefferies analyst Michael Yee estimates that the combined market capitalization of all the biotech stocks valued at under $5 billion is around $350 billion. That compares to a combined cash balance among the top 20 biopharma companies worth over $300 billion. “We have reached a point where Big Pharma has so much cash they could basically buy the whole smid-cap universe,” Yee wrote.
At the end of last year, MRP highlighted a report from SVB Leerink analyst Geoffrey Porges and his team, estimating that eighteen large-cap US and European biopharmas will have more than $500 billion in cash on hand by the end of 2022. Porges said those 18 biopharma majors will have total M&A capacity of $1.72 trillion.
Last year, Moderna expressed interest in new opportunities in nucleic acid technologies, gene therapy, gene editing and mRNA after significantly boosting profits with their COVID-19 vaccine. Now flush with cash, CEO Stéphane Bancel says he’s “never been as busy” as the company considers potential M&A opportunities.
Per Fierce Biotech, Moderna executives recently highlighted two phase 1 trials currently ongoing in propionic acidemia (PA) and methylmalonic acidemia (MMA); the former has already achieved a fully enrolled first cohort and additional patients are being added. “Assuming this is positive, we will do more in rare genetic disease,” said Bancel. |
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