Prime Medicine 'Crispr 3.0' Vs. Crispr Therapeutics (NASDAQ:CRSP) - Seeking Alpha

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Sometimes it's the tortoise and not the hare which wins the race. Despite being founded 10 years ago, CRISPR Therapeutics (NASDAQ:CRSP) could precise good suffer retired to 3-year-old Prime Medicine (NASDAQ:PRME). However that's successful the agelong run. In the abbreviated term, CRSP whitethorn beryllium the amended investment, contempt the imaginable cancer-causing broadside effect of its editing, a broadside effect PRME avoids altogether.

The large occupation with CRISPR-Cas9 oregon "CRISPR 1.0"

Due to biology factors and mean metabolic processes successful the cell, it has been estimated that each compartment successful your assemblage experiences 10,000 to 1,000,000 molecular lesions (damages) per day. So is it truly that large of a woody if you harm them immoderate much with CRISPR-Cas9 editing?

Actually, it is.

It is existent our cells are well-equipped astatine repairing DNA damage, but not each types. The immense bulk of harm comes from oxidative accent and mean cellular chemic reactions, specified arsenic depurination and depyrimidinations. I could constitute a publication astir this taxable but to support it abbreviated and sweet, this graphic volition assistance you understand:

Komor Lab, University of California San Diego

See that 1 successful the mediate with the radiation symbol? That's the aforesaid benignant of harm you are doing with CRISPR-Cas9. Known arsenic double-strand breaks (DSBs), these are the implicit worst benignant of damage. Why? Because the familial blueprint is wholly broken, making close repair difficult.

Even with single-strand breaks (SSBs) determination is inactive the different broadside attached. That attached broadside acts arsenic a guide, meaning the repair mechanisms person much to spell disconnected of, clues arsenic to what is missing connected the breached side.

With DSBs, genomic rearrangements are overmuch much apt to occur. Those deletions, translocations, and fusions successful the DNA are imperishable mutations erstwhile they occur.

DSBs are not a broadside effect of CRISPR-Cas9. They are wholly intentional! That is however the editing is done — breaking some strands of the DNA successful bid to modify them.

DSBs = crab and aging

Not each mutations origin cancer, but ALL cancers are the effect of a mutation.

With 3 cardinal letters successful the quality genome, we don't cognize what the vast, vast bulk of mutations do. Heck, we didn't adjacent afloat representation the quality genome until 2022. No, that's not a typo. The "complete" mapping wide publicized astir 20 years agone was really 92%. We didn't person the exertion to bash the remainder until past year.

You person an estimated 37 trillion cells successful your assemblage and connected immoderate fixed day, trillions of mutations occur. Fortunately, the lone ones which origin crab are those mutations which origin uncontrolled compartment replication AND don't get taken retired by your body's defenses successful time.

As acold arsenic the remainder of mutations? We don't truly cognize what they do, but we bash cognize they're not good.

What causes aging? The error catastrophe mentation of aging was primitively projected by Leslie Orgel successful 1963. Summarized, aging equals the accumulation of familial errors. Specifically, it results from a breakdown successful the accuracy of macromolecule synthesis wrong somatic cells. Eventually reaching a catastrophic level which is incompatible with cellular survival.

While that circumstantial mentation has been mostly disregarded owed to deficiency of evidence, variations followed specified arsenic Leo Szilard's two-hit exemplary of somatic mutation accumulation which made much sense, but did not and could not incorporated aboriginal findings specified as:

• Cellular senescence - Discovery that quality cells tin lone replicate less than 70 generations successful culture. Then they die.
• P53 - Known arsenic the "tumor suppressor" protein, it goes to enactment against damaged DNA, peculiarly double-strand breaks. In doing so, it accelerates aging.
• Telomeres - Like the integrative caps connected your shoelace, these support the ends of your chromosomes. They are repetitive DNA sequences. As you age, they get shorter. The shorter they get, the little apt they are to support what's sandwiched between.

There are different facets to aging but you tin ever nexus them backmost to familial damage/modification.

For example, P53 enactment goes into overdrive to repair double-strand breaks. Cellular senescence is triggered by P53 (and akin P16 and P21) arsenic good arsenic telomeres being excessively short. Telomeres are highly delicate to oxidative DNA damage and different forms.

I won't spell further down this rabbit spread but I springiness you that taste, to amusement you the underlying double-strand interruption attack of CRISPR-Cas9 has follow-on effects which are not good.

If/when accrued crab from CRISPR-Cas9?

Last summertime I was astatine a marina and recalled a speech I had with a vessel mechanic. The full water had conscionable been treated with herbicides and everyone was expected to enactment retired of the h2o for astatine slightest 24 hours.

That's bull. I don't person cancer. I was adjacent successful the h2o past twelvemonth portion they were doing spraying it!

His effect ⁠— an anticipation of origin and effect being intimately linked successful clip ⁠— is however galore radical deliberation of carcinogens and mutagens.

They don't recognize that it takes 6 to 8 years earlier bosom crab has grown ample capable to adjacent beryllium seen connected a mammogram oregon felt. Some instrumentality overmuch longer. Radiation-induced crab tin take 30+ years. I punctual you the benignant of mutations astir associated with radiation are the aforesaid benignant inflicted by CRISPR-Cas9; double-strand breaks.

CRISPR-Cas9 treatments whitethorn look harmless from aboriginal data. Then years later, we whitethorn observe consequences. We don't cognize if they origin cancer.

Yet, CRISPR Therapeutics whitethorn inactive beryllium a large investment

Despite the imaginable dangers, CRISPR Therapeutics is champion positioned for near-term upside. They are furthest on successful objective progression versus the different 2 archetypal names successful this space; Editas Medicine (EDIT) and Intellia Therapeutics (NTLA).

CRISPR Therapeutics Q4 2022 capitalist presentation

Exa-cel, formerly known arsenic CTX001, is successful signifier 3 trials for sickle compartment illness (SCD) and transfusion-dependent beta-thalassemia (TDT). This is successful collaboration with Vertex Pharmaceuticals (VRTX).

The biologics licensing exertion (BLA) for Exa-cel is present under a rolling review with the FDA. That began successful November 2022 and the submission is expected to beryllium implicit by the extremity of Q1 2023. That means determination is simply a existent anticipation this attraction is brought to marketplace this year. That's near-term catalyst fig 1.

Number 2 is adjacent much speculative but I would reason it has decent likelihood of happening; Vertex mightiness buyout CRISPR Tx.

I person owned Vertex for years and followed their concern with CRISPR Tx. Their collaboration statement connected CTX001/Exa-cel was primitively a 50/50 divided of some costs and profits. Then successful 2021, Vertex paid an further $900M conscionable to get an further 10% of profits (60/40). That besides included Vertex paying an further 10% of costs. In different words, Vertex is valuing CTX001/Exa-cell astatine $9B successful and of itself.

Contrast that with the $3.7B marketplace headdress of CRSP. Its endeavor worth is adjacent little astatine $2B since they person truthful overmuch cash.

On the flip-side, it's important to enactment that woody was done astatine the tallness of the COVID marketplace mania. Back erstwhile Cathie Wood could bash nary incorrect and CRSP was a banal she was hyping for not conscionable the ARK Genomic Revolution ETF (ARKG), but besides her flagship ARK Innovation ETF (ARKK). CRSP was astir 2.5x higher in April 2021 than it is today. Would that aforesaid collaboration amendment with Vertex beryllium truthful generous today? You beryllium the judge.

Intellia has akin collaboration agreements with Regeneron (REGN) connected multiple programs. Financial details person been much opaque than that of CRSP/VRTX. However if you work betwixt the lines (revenue reported successful SEC filings) it's harmless to reason those collaborations are little generous.

In 2021, Intellia's CEO adamantly said the institution is "not for sale" but of people companies always accidental that, adjacent if they truly would see it. Perhaps REGN volition bargain NTLA successful the adjacent aboriginal but if I had to stake connected it, VRTX is much apt to bargain CRSP based connected however assertive they've been connected that partnership.

CRSP vs. NTLA vs. BEAM vs. EDIT

Given wherever CRISPR Therapeutics is astatine successful objective trials, 1 would deliberation their valuation would beryllium importantly greater than peers. That's conscionable not the lawsuit close now.

Data by YCharts

As you see, CRSP is cervix and cervix with its closest peer, NTLA, contempt being overmuch further on successful objective progress.

You tin besides number Beam Therapeutics (BEAM) arsenic a adjacent to both, contempt not being CRISPR-Cas9 successful the accepted sense. Base editing, which has been coined CRISPR 2.0, involves a variant of Cas9 that lone nicks the DNA alternatively than doing double-strand breaks.

Beam Therapeutics firm presentation, Nov 2022

However with basal editing you tin lone alteration a azygous nucleotide (one letter). Cytidine basal editors oregon CBEs let C>T conversions and adenine basal editors oregon ABEs let A>G conversions. Only about 1/3 of the ~75,000 known familial errors tin beryllium fixed with basal editing. So portion it should beryllium substantially safer than what CRISPR Therapeutics is doing, it is simply a not a substitute. They are targeting antithetic diseases.

As for EDIT, who sports a marketplace headdress conscionable 1/5th that of CRSP, NTLA, and BEAM, that's due to the fact that their objective trials are successful disarray. Their foremost absorption was ocular diseases — uncommon causes of blindness — and efficacy has been lackluster successful trials.

As idiosyncratic who follows macular degeneration research, this is not that surprising. Getting vectors, which you tin deliberation of arsenic payload transportation vehicles, to enactment successful the retina is rather challenging. Regardless, Editas has mislaid collaboration partners and aggregate CEOs successful the past mates years.

Despite deficiency of objective progress, Editas is invaluable for the CRISPR-Cas9 IP. They are 1 of the 3 primitively licensed to the exertion for quality therapeutics:

Labiotech

The IP ownership is simply a messiness and being disputed successful aggregate tribunal battles. If you're not familiar, Broad Institute and UC Berkeley some assertion to beryllium the archetypal inventor of CRISPR-Cas9. Long ago, each licensed retired the tech to the aforementioned companies. The latest 2022 tribunal ruling really favors EDIT (and not CRSP) arsenic the rightful user. If this is yet upheld, it volition beryllium important hazard for CRSP. However don't clasp your breath, arsenic radical supra my wage people are not betting connected that, judging by EDIT's marketplace headdress and endeavor value.

Since basal editing is simply a saltation of CRISPR-Cas9, immoderate different institution wishing to usage it indispensable licence the archetypal IP from CRSP, EDIT, oregon NTLA. That brings america backmost to Prime Medicine. They licence their IP from BEAM, who licenses it from EDIT.

Prime Medicine vs. CRISPR Therapeutics

It's hyped arsenic "CRISPR 3.0" and actually, the hype whitethorn beryllium justified.

Prime editing is an improvement of basal editing. It expands the constricted scope of existent basal editing abilities (4 imaginable combinations C>T, G>A, T>C, and A>G) to each 12 operation swaps. That means it tin delete agelong lengths of disease-causing DNA oregon insert DNA to repair errors, each successful a mode safer than what CRISPR Therapeutics is doing.

So arsenic an investment, it sounds similar PRME is simply a no-brainer implicit CRSP, right?

Not necessarily.

For starters, let's comparison the marketplace caps and endeavor values:

Data by YCharts

CRSP has a marketplace headdress implicit treble that of PRME, yet erstwhile you look astatine their endeavor worth (which factors successful currency and debt) the 2 companies are adjacent identical valuations; $1.80B and $1.88B.

But they are obscurity near the aforesaid level of objective progress. One is successful signifier 3 portion the different isn't adjacent successful any. Their archetypal isn't expected to commencement until mid-to-late 2023.

Prime's pipeline

You won't find this connected their website. You request to look astatine their S-1 filing from past year.

Prime Medicine S-1 filing

They mean to bash some ex vivo (outside the body) and in vivo (in the body) editing. The second is preferrable, if possible. As you spot below, it would impact less steps for each parties; the manufacturer, the provider, and the patient. This saves money.

CRISPR Tx website

CRISPR Tx website

Those graphics travel from CRSP but the attack is the same, careless of company. One crushed NTLA's banal marketplace headdress is adjacent CRSP, contempt being down successful objective progress, is due to the fact that of what they've demonstrated truthful far; palmy successful vivo quality editing for transthyretin amyloidosis (ATTR).

Based connected today's editing platforms, astir would hold the perfect approaches would beryllium successful vivo utilizing basal and premier editing.

This places Prime successful an envious presumption successful presumption of marketplace potential. Remember lone astir 1/3rd of familial diseases tin beryllium fixed with a azygous nucleotide alteration (i.e. Base Therapeutics). To hole the remainder without double-strand breaks, it appears that Prime Medicine offers the champion solution we cognize of today.

What astir aboriginal dilution?

This is the #1 occupation with investing successful aboriginal signifier biotech. Not lone bash their therapeutic candidates request to beryllium proven, but they request tons of wealth and clip to bash so. Because of changeless secondary offerings to rise funds, aboriginal investors often extremity up arsenic bagholders, adjacent if the therapies yet succeed.

It is imaginable and adjacent apt that Prime volition beryllium capable to bash much non-dilutive superior raises than your mean biotech. Similar to the VRTX collaborations with CRSP, fixed the hype down this tech, 1 would anticipation and expect Prime to enactment retired likewise lucrative arrangements for nett and outgo sharing connected pb candidates, without issuing shares. But determination are nary guarantees.

Most likely, determination volition inactive beryllium some secondaries successful the future. Then there's the stock-based compensation, which tin truly adhd up implicit time. Contrast that to CRSP who, fixed the signifier they are present at, is capable to rise important amounts without dilution.

Who wins? That depends connected your timeframe

No uncertainty the earliest investors successful Prime are presently sitting connected a bully gain. While I haven't invested successful backstage biotech for respective years, this 1 intrigued maine truthful overmuch that I did scope retired to Prime arsenic soon arsenic the institution was formed, earlier they adjacent had a website, and my aggregate inquiries to aggregate radical determination each went ignored. That was erstwhile I wanted in.

As acold arsenic investing now? I person started a tracking presumption but fixed the marketplace headdress approaching $2B, I'm successful nary hurry to add. Assuming they some stay independent, I bash deliberation implicit a long-time framework — accidental 5 to 12 years — Prime has existent imaginable to outperform CRISPR Tx, possibly dramatically, fixed the superior IP. But adjacent superior IP cannot flooded inferior execution. Who's to accidental they don't messiness it each up similar Editas?

In the adjacent to intermediate, accidental betwixt present and 2 years, likelihood look to favour CRSP for outperformance. Of people that assumes they don't marque a large stumble. If Exa-cell/CTX001 fails, I would expect the stock terms to get chopped and half, if not worse.

For both, there's ever the hazard of a amended rodent trap from idiosyncratic else. Prime seems to person nary competitors for present but that whitethorn change. Late past year, a squad from MIT developed a present editing method they telephone PASTE (Programmable Addition via Site-specific Targeting Elements). It doesn't impact DSBs but since it is built upon a saltation of CRISPR-Cas9, IP licensing volition beryllium required to make commercially.

Going backmost to the information concerns with alleged CRISPR 1.0, retrieve that some attraction whitethorn beryllium amended than no treatment. Even if not perfect owed to the DSBs, these therapies tin service arsenic steppingstones, until safer ones travel along. This is wherefore CRSP and peers are inactive important.

Prime Medicine is inactive nether the radar

In presumption of adjacent word catalysts for PRME, hype mightiness beryllium the lone happening that tin perchance propel the valuation higher successful 2023.

On that note, Cathie Wood did acquisition PRME astatine the IPO oregon instantly thereafter for ARKG, but not ARKK. Of people her getting down a sanction close present volition not determination it up and successful fact, whitethorn person the other effect.

Feng Zhang and Bill Whitaker astatine the Broad Institute signaling 60 Minutes, credit: Broad Institute

You whitethorn callback connected April 29, 2018, the amusement 60 Minutes introduced CRISPR-Cas9 to the wide public. This is what happened to the banal price:

Data by YCharts

Did 60 Minutes origin that? Who knows? What tin beryllium said is flashy biotech companies person a past of going connected this amusement to beforehand themselves.

Here's however the Prime Medicine website describes their approach:

Prime Editing is simply a exertion that acts similar a DNA connection processor to "search and replace" disease-causing familial sequences astatine their precise determination successful the genome, without causing double-strand DNA breakage.

Hmm... has each the earmarks of flashy! Queen Cathie whitethorn beryllium de-throned, but if 60 Minutes oregon immoderate different salient media tally with the "search and replace" of "CRISPR 3.0" narrative, it could determination the banal up successful an unjustified manner. That is the hazard of not buying it successful the adjacent year, contempt objective milestone being acold off.

When (and if) CRISPR Tx reaches the milestone of FDA approval, I would not beryllium amazed to spot 60 Minutes bash a follow-up piece. Then again, each of media volition beryllium talking astir the archetypal approved CRISPR-Cas9 therapy, truthful not definite 60 Minutes specifically volition substance overmuch astatine that point. Seems similar a large catalyst for CRSP if they get support this year.

In closing, I should notation what prompted maine to constitute this CRISPR vs. Prime comparison; questions I got asked successful my past portion wherever I touched connected these names. It's fittingly titled: 10 Potential 10x Return Stocks For The Next 10 Years. I stress that imaginable means possible, not probable.

I similar to bargain agelong word winners erstwhile they person abbreviated word problems. You whitethorn telephone them falling knives, I telephone them being connected sale. Most of what I bargain is with the mindset of ne'er selling, oregon astatine the precise least, holding respective years. With a agelong to precise agelong word horizon, volatility doesn't fuss maine excessively much. I've been investing for implicit 20 years now, done 3 large bubbles (dot com, GFC, and the present). I saved up $500, the minimum deposit required to unfastened an UTMA brokerage account, successful mediate school. I convinced my grandpa to co-sign the account, contempt the information that helium nor anyone other successful my household owned stocks oregon immoderate different investments (aside from CDs). Investing has been my foremost involvement for arsenic agelong arsenic I tin remember. While classmates whitethorn beryllium speechmaking Harry Potter, I was into Security Analysis and the like. Although I grew up trying to emulate the Buffett style, I morphed into much of a Munger mindset. Today, astir apt Mohnish Pabrai would champion bespeak my doctrine of favoring undervalued, portion not outright ignoring generational maturation opportunities. I person been self-employed my full beingness and for the past respective years, person been investing afloat time. Prior to that, for 6 years I ran an online concern successful the recognition paper space. I started it the aforesaid period Bear Stearns went nether and contempt my mediocre timing and the information that each my customers (banks) were successful trouble, I maintained profitability each 4th and ne'er took immoderate extracurricular investments oregon loans. Eventually I sold it to a publically traded net company.  While moving that business, the currency travel coming from it afforded maine the accidental to marque precocious risk, precocious reward investments successful backstage biotech companies. Two went public. Life sciences is simply a large interest/hobby of excavation but due to the fact that it evolves truthful rapidly and requires immense amounts of continuous owed diligence, it is thing I present lone bash connected the peripheral of my portfolio. While the immense bulk of what I bargain whitethorn beryllium considered boring, I bash marque investments successful immoderate highly speculative stocks.  Lastly, portion I mostly hold that you mostly suffer much wealth preparing for a clang than you bash successful an existent crash, I similar to support a steadfast currency allocation connected manus for those opportunities erstwhile everyone other is panicking. For those funds I similar munis and successful fact, person been betting connected agelong duration for astir a decennary now. Contrary to the prevailing mindset this past decade, there's acold excessively overmuch indebtedness to prolong higher rates for immoderate meaningful magnitude of time. I person been connected Seeking Alpha for astatine slightest a decennary but did not commencement penning connected present until 2020, owed to boredom during covid. Even much than parking, I despise paying for concern research. As such, I volition lone constitute astir 1 nonfiction connected present each 30 days, which is the minimum required to support SA Premium access. I would alternatively slit my wrists than complaint you for my content, truthful you won't spot a marketplace work from me. Raised successful Michigan, unrecorded successful Manhattan Beach, CA.