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CRISPR Recovery? “Furor” Briefly Snips $500M From Companies’ Values

Xconomy Boston — 

Is the J.P. Morgan CRISPR rollercoaster ride over? As rain fell heavily in San Francisco Monday, the first day of the massive healthcare conference, biotech stocks did, too. At least three of the companies getting drenched could blame a research paper that came out the previous Friday, January 5, after the markets closed.

In fact, it was a scientific cofounder of CRISPR Therapeutics (NASDAQ: CRSP), one of those companies, whose paper—published without peer review—sent the stocks tumbling.

CRISPR and its rivals Intellia Therapeutics (NASDAQ: NTLA) and Editas Medicine (NASDAQ: EDIT), all racing to use the CRISPR-Cas9 gene editing system to treat human diseases, lost a collective half-billion dollars in market value on Monday. “They’re not the happiest with me,” Matthew Porteus, the Stanford University pediatrician and genome-editing researcher who was the paper’s lead author, told Xconomy this week.

The companies’ shares began to climb again “as the furor subsided,” Porteus noted. By Thursday’s close, CRISPR shares had rebounded to close above last Friday’s peak. Intellia and Editas had not quite climbed back but were within a few percentage points.

The furor came from what Porteus considered an overreaction to his paper, which described pre-existing human immunity to the protein Cas9—the scissors in the system that snips DNA to disable malfunctioning genes and potentially swap in new ones. CRISPR Therapeutics CEO Samarth Kulkarni (pictured) agreed about the overreaction in an interview Monday. “We’re not surprised by the data,” said Kulkarni. “What’s surprising is how the media have interpreted that data that Matt published.”

CRISPR Therapeutics officials said they have been aware of Porteus’s work for a long time but did not know the paper was coming. The timing was notable; two days before is publication, on Jan. 3, the publicly-traded CRISPR launched a big stock sale. On Jan. 4 the company said it had sold 5 million shares at $22.75 apiece. “We did not have a heads-up about the specific paper and learned about it when it was posted publicly,” vice president of investor relations Christopher Erdman told Xconomy. (Porteus said that the paper “took them by surprise.”)

When the immune system is on guard against an intruder because of previous exposure, a new encounter could spur a strong reaction, especially if the body rallies the immune system’s attack dogs, known as T cells to the defense. The two main types of Cas9 in therapeutic use are derived from two bacteria that cause infections, Staphylococcus aureus and Staphylococcus pyogenes. Most people have been exposed to them, so finding antibodies and T cells with memories of Cas9 isn’t surprising. Porteus and colleagues did not find T cells against S. pyogenes Cas9, but “this does not necessarily establish that they are not present within the human population,” they wrote.

The worry is that the immune system will attack a Cas9 therapeutic as it enters the body—perhaps negating the therapeutic effect, or perhaps causing harm to the patient. As the paper notes, early progress in gene therapy was thwarted by overheated immune responses like one that killed a young man taking part in a trial at the University of Pennsylvania. The tragedy blunted the field in the U.S. for years.

No CRISPR-Cas9 program has yet reached human testing in the U.S. If all goes well, the three companies and perhaps others could have medicines in clinical trials this year or in 2019.

Porteus himself said at a Senate hearing last fall that he expected multiple clinical trials in the U.S. in the next 18 months.

The paper is careful to note that researchers are already looking for workarounds, such as new versions of Cas9 or different enzymes entirely. Editas has begun working with an enzyme called Cpf1, for example, which it licensed from its scientific founder Feng Zhang of the Broad Institute.

The paper also notes the unlikelihood of an immune reaction when a patients’ cells are edited outside the body then reintroduced—which is how many CRISPR-Cas9 therapies, such as CRISPR Therapeutics’s programs for blood disease and blood-borne cancer, will proceed. “There is no Cas9 exposure in the patient from this approach,” CRISPR chief scientific officer Bill Lundberg told Xconomy. For therapies that infuse CRISPR-Cas9 directly into a patient’s bloodstream—to reach cells in the liver, for example—developers expect the delivery package for the medicine to protect against immune response.

Nonetheless, Porteus would like to see more research to determine how long human cells edited with Cas9 retain a fragment of the protein on their surface—a potential flag for immune watchdogs—even after the scissors have effectively disappeared from the interior of the cell. He said those experiments are beyond his expertise, and he hopes his paper spurs immunology experts “to look at that in a sophisticated fashion.”

Porteus was so eager to spur more research, in fact, that he jumped the gun, publishing his work without peer review—a big caveat about the paper. He used a new publishing system, dubbed preprint, that a growing number of academics are encouraging to share work more quickly. (A major scientific journal is currently reviewing the paper for publication. Porteus said he has not yet received any feedback from its reviewers.)

“It’s way better for us to know about this issue now than to give a CRISPR-based drug to a patient and have something awful happen,” he said. “That would do more to set the field back than a preprint paper.”