Intellia Investors Are Dumping Stock on News of Crispr Gene-Editing Success

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Patients who got a one-time gene-editing infusion showed sustained improvement in a genetic disorder that can lead to fatal swelling when untreated. Wall Street, however, spurned the good news.

Friday’s Phase 1 study results are encouraging news for genetic medicine and for the treatment developer

Intellia Therapeutics

(ticker: NTLA)—but investors greeted it by dumping the company’s stock, along with those of others applying the Nobel-prize winning technique for altering genes that is known as Crispr-Cas9. Investors have clearly lost patience with the slow-paced clinical trials of genetic therapies, and some are trying to take advantage of the upbeat news to get out of their positions.

Intellia stock fell as much as 16% Friday morning before settling into a 7% loss in midafternoon, at $63.90, even though admirers such as RBC Capital Markets analyst Luca Issi considered the early-phase study a good outcome.

Selling hit all the Crispr medicine developers.

CRISPR Therapeutics

(CRSP) saw a 7% drop in its shares.

Editas Medicine

(EDIT) stock fell 11%. Caribou Biosciences (CRBU) dropped 13%, while

Beam Therapeutics

fell 8%. Crispr gene-editing treatments can make permanent changes in our DNA by homing in on specific genes and then disabling them or rewriting harmful sections of their genetic instructions.

Asked about Wall Street’s selling, an Intellia spokesperson said the biotech can’t explain “every stock price fluctuation.”

“But the news is clearly all good for Intellia and for the patients Intellia hopes to serve,” the spokesperson said.

The Phase 1 interim results announced by Intellia at a Berlin medical conference Friday morning provided the first data on a potential permanent fix for hereditary angioedema—a condition in which a miswritten gene in liver cells produces a protein that causes dangerous swelling throughout the body.

In six patients, the one-time treatment reduced blood levels of the troublesome protein by over 90%—a more-profound effect than achieved by chronic doses of the approved drug Takhzyro, developed by

Ionis Pharmaceuticals

(IONS) and marketed by

Takeda Pharmaceutical

(TAK). Swelling attacks also decreased.

The angioedema results were as good as what RBC’s Issi said would be a “blue sky” outcome in an advance note on Thursday. Such a showing could lift Intellia shares above $85, he had hoped. His 12-month target price is $150.

Speaking with Barron’s Friday after hearing from the company and investors, Issi said some of Friday’s stock slump may reflect hedge funds “selling on the news,” after a previous run up in Intellia shares ahead of the anticipated good news. There were some concerning data—he notes—showing highly-elevated liver enzymes in one patient. The affects subsided, but investors are skittish about the novel gene-editing therapies.

On Friday, Intellia also announced good longer-term results in another Phase 1 study of a treatment it’s developing in partnership with

Regeneron Pharmaceuticals

(

REGN

). This Crispr infusion knocks out a rogue gene in liver cells, whose poisonous output damages the heart or nerves to cause a disease known as transthyretin amyloidosis, or ATTR. In 12 patients, the treatment caused a more than 90% drop in a poisonous protein made by a rogue gene in their liver cells. Some patients have been measured for six months, with the results sustained.

The one-and-done Crispr treatment for ATTR looks on track to rival the chronic drug treatment Onpattro from

Alnylam Pharmaceuticals

(ALNY), or the $2 billion-a-year Vyndaqel from

Pfizer

(PFE). Successful trial results reported this year by Alnylam had led to a pop in its stock.

Regeneron stock was flat Friday, despite the selling in Intellia’s stock.

On a Friday morning call before the stock market opened, Intellia officials happily discussed their plans to advance to Phase 2 controlled trials for the ATTR study. CEO John Leonard called the results a vindication of the company’s modular approach to Crispr therapies, whereby it can knock down different rogue genes by simply changing the bit of guide-RNA on its products.

RBC’s Issi lamented in a Friday note that the Intellia stock selloff makes little sense. “We are buyers given we believe that [Intellia] is the best gene-editing name in the space,” he declared.

Write to Bill Alpert at [email protected]