Shares of Editas Medicine EDIT plunged 23.8% on Dec. 13 after it announced a strategic decision to end the development of its lead gene editing therapy, reni-cel, following the failure of an extensive search to yield a commercial partner. The company is already facing a massive cash crunch and without a partner, it is unable to sustain the development cost of reni-cel. The candidate was evaluated in a phase I/II/III RUBY study and a phase I/II EdiTHAL study for severe sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT), respectively.

Per Editas, it plans to work closely with the clinical study sites, regulators and other parties to determine the path forward for patients enrolled in the RUBY and EdiTHAL studies. The abandonment of these studies has significantly delayed the company’s hopes of earning any revenues.

As part of its strategic reprioritization efforts, Editas announced that it will now focus its resources on in vivo (within the living organism) pipeline development. The company aims to accelerate its intent to achieve in vivo human proof of concept in approximately two years. It has also employed cost-saving measures, along with a decision to cut its workforce by approximately 65% over the next six months, to extend the cash runway into the second quarter of 2027.

However, an in vivo candidate for SCD and TDT is yet to enter Editas’ clinical-stage development, which means such a product is several years away from commercialization. The company is also expected to face new hurdles in the development challenges as the pharma industry is prone to setbacks, which currently makes an approved in-vivo therapy a far-fetched dream.

In the past three months, shares of Editas have plunged 62.7% compared with the industry’s 11.1% decline.

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Basis for EDIT’s Decision to Pivot to In-Vivo Pipeline

Editas had earlier reported that it has successfully demonstrated in vivo preclinical proof of concept for editing hematopoietic stem and progenitor cells and inducing fetal hemoglobin in humanized mice. These mice were engrafted with human hematopoietic stem cells (HSCs) and lacked their hematopoietic cells.

In the latest press release, Editas reported achieving approximately 40% editing of the HBG1/2 promoter site in the preclinical study. This was accomplished using their proprietary targeted lipid nanoparticle (tLNP) system, designed for extrahepatic tissue delivery. The tLNP technology enabled the delivery of a single dose of Cas12a editing machinery directly to HSCs in humanized mice. This editing induced a functional outcome of fetal hemoglobin (HbF) production, as evidenced by the presence of HbF-expressing human red blood cells (averaging 20%) within a month.

Additionally, the biology of HBG1/2 has been validated in clinical settings, such as the RUBY study with reni-cel, further supporting its potential. Beyond HSCs, Editas achieved in vivo proof of concept for high-efficiency gene editing in the liver of non-human primates through a collaboration with Genevant.

Based on such encouraging pre-clinical results, Editas believes that it has a clear path forward to develop a potentially first- and best-in-class in vivo gene-edited medicine for the treatment of SCD and TDT. An in vivo medicine could be more beneficial for SCD and TDT patients compared to the ex-vivo candidate, reni-cel, given administrative complexities. Approved ex vivo gene therapies include Vertex /CRISPR Therapeutics’ Casgevy (exagamglogene autotemcel) and bluebird bio’s Lyfgenia (lovotibeglogene autotemcel).

Editas expects to share pre-clinical data and further development timelines from these programs in the first quarter of 2025.

Editas Medicine, Inc. Price and Consensus

Editas Medicine, Inc. price-consensus-chart | Editas Medicine, Inc. Quote

EDIT’s Zacks Rank & Stocks to Consider

Editas currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the sector are Castle Biosciences CSTL, CytomX Therapeutics CTMX and Spero Therapeutics SPRO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, 2024 estimates for Castle Biosciences have improved from a loss of 58 cents per share to earnings of 34 cents. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.13 to $1.84. In the past three months, shares of Castle Biosciences have lost 7.6%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 60 days, estimates for CytomX Therapeutics’ 2024 loss per share have narrowed from 29 cents to 5 cents. Estimates for 2025 loss per share have narrowed from 56 cents to 35 cents during the same timeframe. In the past three months, CTMX stock has lost 8.3%.

CytomX’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 115.70%.

In the past 60 days, estimates for Spero Therapeutics’ 2024 loss per share have narrowed from $1.59 to $1.29. Estimates for 2025 loss per share have narrowed from $1.54 to 79 cents during the same timeframe. In the past three months, Spero’s shares have lost 19.5%.

SPRO’s earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 94.42%.

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