In This Article:
Key Points
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Editas Medicine focuses on developing gene-editing treatments.
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The struggling biotech recently gave up on its leading pipeline candidate.
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Even if it matches Wall Street's estimates in the next year, the stock is too risky.
Over the past few years, investors have moved away from somewhat speculative and unprofitable companies to put their money into safer, steadier investments. Editas Medicine (NASDAQ: EDIT), a gene-editing-focused clinical-stage biotech, is firmly in the speculative camp, which is why its shares are down by 97% since early 2021.
The stock is trading for about $1.50 right now. However, its average price target of $3.38 (according to Yahoo! Finance) implies a potential upside of about 125%. Should investors scoop up the company's shares expecting them to soar?
Editas Medicine's challenges
Developing and marketing gene-editing therapies is challenging, as Editas Medicine knows well. The company's previous leading program was called reni-cel. It was being tested as a potential treatment for two rare blood disorders: sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT).
Here is the problem: Ex vivo gene-editing therapies are complex to administer. The process requires collecting patients' cells, editing them, and reinserting them into the patients. Even going through the clinical trial phase for a treatment of this kind is more expensive than if it were a simple oral pill.
Though reni-cel was making progress and showing strong signs of efficacy with the patients who had received treatment, Editas Medicine decided to discontinue its development because it couldn't find a commercial partner with big pockets.
Even before that, though, Editas Medicine was fighting an uphill battle. Between 2022 and 2023, three gene-editing therapies were approved in the U.S.: Zynteglo, Lyfgenia, and Casgevy. Zynteglo and Lyfgenia treated TDT and SCD, respectively, while Casgevy targeted both. Editas Medicine's relatively slow progress with reni-cel didn't bode well with investors, considering there were already competing therapies on the market.
The company's decision to discontinue this program was the right one -- the move hardly makes the stock particularly attractive, but trying to push reni-cel toward commercialization despite its slow progress and the competitive landscape would have been prohibitively expensive.
Is there any hope for the stock?
Editas Medicine has decided to pivot toward developing in vivo gene-editing therapies. Unlike the ex vivo variety, these kinds are administered via injection into the body of therapeutic genes -- so there is no need to collect the patients' cells. Editas Medicine has partners for some of its in vivo programs. It is working on some medicines with Bristol Myers Squibb, a leading pharmaceutical company.