The gene-editing discovery, which won the 2020 Nobel Prize in Chemistry, has the biotech bully pulpit, with several of the bigger companies already publicly traded and others announcing IPOs after successful funding rounds. Hundreds of startups are hustling to harness the gene-editing tool’s broad potential.
During the height of the Covid-19 pandemic, when all eyes were on the science of vaccines, a new era in biotechnology quietly took off for the stratosphere. At its centre is a revolutionary gene-editing program known as CRISPR-Cas9, a tool that uses bioengineered DNA sequences and enzyme catalysts to alter gene pairs. CRISPR acts like a tiny pair of scissors, allowing scientists to nip and tuck the DNA of plants and animals.
The innovation has sparked a race to the top with the global gene-editing market share predicted to soar from about $5 billion in 2021 to somewhere between $20 billion and $35 billion by 2030. The prediction has stayed firm even as some major companies’ stock prices have fallen in the past few months, a phenomenon attributed to pending results.
The gene-editing discovery, which won the 2020 Nobel Prize in Chemistry, has the biotech bully pulpit, with several of the bigger companies already publicly traded and others announcing IPOs after successful funding rounds. Hundreds of startups are hustling to harness the gene-editing tool’s broad potential. CRISPR initiatives are diverse and ambitious. They include the development of techniques to maximize crop yields, personally tailored cancer treatments, and protocols for rare diseases. Some of the bigger biotech entities have begun to broaden their focus to therapies for common conditions, such as diabetes and heart disease.
One initiative making news is the development of CRISPR-based DNA-vaccine enhancers for COVID-19 at the Innovative Genomics Institute, a collaboration between the University of California, Berkeley, and the University of California, San Francisco. Institute researchers say the enhancers would radically reduce the time needed to develop updated Covid-19 vaccines.
Then there are the outliers, some with Jurassic Park-sized ambitions. One startup hopes to resurrect the long-extinct woolly mammoth.
From Wired in 2021:
It will be difficult to remember 2020 as anything other than the year Covid-19 drew the world to a socially distanced standstill. But while thousands of life scientists pivoted to trying to understand how the novel coronavirus wreaks havoc on the human body, the field of CRISPR gene-editing nevertheless persisted. In fact, it triumphed.
Barron's put an emphasis on CRISPR’s potential to completely change healthcare as we know it:
Call it the Industrial Revolution for healthcare. Thanks to our rapidly evolving understanding of biology and the application of new technological tools — and a bit of urgency sparked by the Covid pandemic — explosive change is coming in our ability to diagnose, treat, and even cure many debilitating diseases. Indeed, a golden age could be dawning for patients and healthcare practitioners — and investors in pharmaceutical and biotech stocks.
Estimates vary on the size of the gene-editing market. A perusal of more than a dozen independent reports placed today’s global market share at about $5 billion with a projected compound annual growth rate (CAGR) of about 15%. It’s CRISPR’s show, at least for now. While there are other promising gene-editing products available, CRISPR is the most studied and the most affordable.
The industry is moving fast, with top companies soaring from inception to IPO in just a couple of years. Prime Medicine announced its upcoming IPO just one year after it was formed in July of 2020. The Cambridge, Massachusetts-based company raised $315 million in combined Series A and B funding, leading to a valuation of $1.2 billion, according to Forbes. Prime is working with researchers to improve CRISPR’s precision, enabling scientists to snip out up to 90% of the DNA mutations that cause genetic diseases.
It is an ambitious, perhaps seemingly audacious, goal, but no more so than the creation of CRISPR itself. Wall Street Journal reporter Walter Isaacson explained:
The innovation was based on a trick that bacteria have used for more than a billion years to fight off viruses, a talent very relevant to us humans these days. In their DNA, bacteria develop clustered, repeated sequences that can recognize and then chop up viruses that attack them.
The 2012 discovery of CRISPR (now CRISPR-Cas9) has been credited to Emmanuelle Charpentier of the Max Planck Unit for the Science of Pathogens in Berlin and Jennifer Doudna of the University of California, Berkeley. The two shared the Chemistry Nobel, which placed CRISPR on the gene-editing throne and gave heightened prestige to companies capitalizing on the tool. The discovery had already been commercialized with unusual speed, but the CRISPR acronym became more widely known in 2021. Major financial publications post monthly or weekly lists of CRISPR stock prices with investment recommendations.
In short, CRISPR has changed everything. The journal Nature quantified the enormity of the discovery in a 2021 newsletter:
“The ability to cut DNA where you want has revolutionized the life sciences,” said Pernilla Wittung Stafshede, a biophysical chemist and member of the Nobel chemistry committee, at the prize announcement. “The ‘genetic scissors’ were discovered just eight years ago, but have already benefited humankind greatly.”
In less than a decade, researchers have used CRISPR-Cas9 to develop genome-edited crops, insects, genetic models, and experimental human therapies. Clinical trials are underway to use the technique to treat sickle-cell-anaemia, hereditary blindness and cancer. Doudna, Charpentier and others in the field, have launched a generation of biotechnology companies aimed at developing the technique to achieve these goals.
At the top of the heap are companies like CRISPR Therapeutics AG (ticker: CRSP), which is using the gene-editing tool to develop novel therapies for blood disorders and oncological cancers. Several of the company’s protocols are already in human clinical trials.
CRISPR Therapeutics AG is helmed by Nobel Prize co-winner Doudna, which brings to the fore another aspect of the CRISPR story: global jockeying for patents. Doudna’s university, UC Berkeley, has been battling for sole ownership of CRISPR intellectual property rights in the US. The problem is that Berkeley is not the only American institution with a hand in developing the CRISPR tool, and competition is hot. A CRISPR patent could lead to untold millions as the gene-editing market expands.
Berkeley took a big hit in 2017 when the US Patent and Trademark Office ruled that the Broad Institute of Cambridge, Mass., a collaboration between Harvard University and the Massachusetts Institute of Technology, could keep its patents to use CRISPR–Cas9 in eukaryotic cells. Eukaryotics — the sophisticated nucleus-bearing cells of animals and plants — are considered the cell jackpot in the life sciences. Industry watchers expect more patent filings and more battles on the US and European fronts.
Another company making big waves is Inari, a Cambridge-based startup developing a seed platform to engineer crops that require less water, fertilizer, pesticides, and land. The company announced this spring that it had raised $208 million in Series D funds and has reached a valuation of $1.2 billion. Inari is focused, for now, on US agriculture’s heavy hitters: soybeans, and corn. The company says it will require 300 million acres of land in North and South America for its enterprise, emphasizing that its SEEDesign platform can increase soybean and corn yield by 20% while lowering water usage by 40% and reducing corn's nitrogen needs by 40%.
Forbes recently wrote:
One of the main focuses of agricultural biotechnology is to feed a hungry world in a more sustainable way. Many current farming methods are inefficient because they require large amounts of water, fertilizer and pesticides. Agricultural biotech is trying to solve these problems by starting at the seed level. Inari is using gene editing to change food production by making it more sustainable.
CRISPR technology has generated controversies on many fronts, but none more cataclysmic than the brouhaha sparked by He Jiankui, a scientist at the University of Hong Kong. He used CRISPR to create “designer babies,” in this case, twin girls. When the babies were embryos, He used the CRISPR tool to edit out the gene that produces a receptor for the human immunodeficiency virus (HIV), which causes AIDS if left untreated.
The Wall Street Journal had this to say:
There was an immediate outburst of awe, and then shock. Arms flailed, committees convened. After more than three billion years of the evolution of life on this planet, one species (us) had developed the talent and the temerity to seize control of its own genetic future. We seemed to have crossed the threshold into a whole new age, perhaps a brave new world.
Other ventures have provoked disbelief and shock.
Colossal, a startup with labs in Boston and Dallas, announced in September that it plans to genetically resurrect the woolly mammoth and then place the creatures on the Siberian tundra where they once flourished, albeit thousands of years ago. Colossal exceeded industry expectations by raising $15 million in initial funding. Colossal founder George Church, a biologist at Harvard Medical School, said the unexpected level of funding will help the company move faster in its efforts to develop an actual mammoth calf. Church concedes that is still a few years away.
Colossal says it plans to develop the calf by editing elephant DNA and adding genes for mammoth traits, such as dense hair and thick fat for withstanding cold. The New York Times took an in-depth look at the project recently.
Despite major growth in the gene-editing industry, several publicly traded companies have seen big drops in stock prices recently, CRISPR Therapeutics AG among them. Bank of America has a "buy" rating and a $175 price target for CRSP, which was valued at $77.05 on Dec. 2. US News & World Report's Money section still lists the company among its 7 Top Gene-Editing Stocks to Buy, noting that “the stock's risk-reward skew is favourable since the company will be reporting more clinical data by year's end.”
Industry watchers seem to agree: the great potential of the burgeoning gene-editing market is yet to come, but come it will.
This article is not meant to offer investment advice, but rather highlight a cutting-edge industry that has been getting attention from the markets.
Tamara Kerrill Field’s writing and commentary on the intersection of race, politics and socioeconomics has been featured in US News & World Report, the Chicago Tribune, NPR, PBS NewsHour, and other outlets. She lives in Portland, ME.