2023-05-19 10:32:26 ET
Summary
- Regulatory marketing authorization filings for its lead drug candidate were submitted to U.S. and international bodies.
- Three weeks separate the U.S. filings from that of a competitor's product.
- Delays could be costly, surrendering first-to-market advantage.
CRISPR Therapeutics (CRSP) is a large (~$5 billion market cap) gene editing company developing gene-based medicines using its proprietary clustered regularly interspaced short palindromic repeats and the CRISPR-associated protein 9 (CRISPR/Cas9) platform. On April 3, they completed the rolling Biologics License Applications (BLAs) to the Food and Drug Administration (FDA) for exagamglogene autotemcel (exa-cel, formerly known as CTX001) to treat sickle cell disease ("SCD") and transfusion-dependent beta thalassemia (TDT). The BLAs include requests for a shorter 8-month Priority Review instead of the standard 12 months. In December 2022, a Marketing Authorization Application for exa-cel was similarly submitted to the European Medicines Agency and the U.K.'s Medicines and Healthcare products Regulatory Agency. Given the negative market reaction with a (wrongly) perceived regulatory review delay with Ardelyx ( ARDX ), investors may want to wait until the FDA sets the review timeline before buying.
CRISPR/Cas9 gene editing technology allows for precise, directed changes to genomic DNA. CRISPR Therapeutics' broad portfolio of therapeutic programs span across inherited blood disorders, oncology, regenerative medicine and rare diseases (Figure 1). Strategic collaborations have been established with large companies such as Vertex Pharmaceuticals ( VRTX ) and Bayer ( OTCPK:BAYRY ); Vertex acquired ViaCyte last July. Meanwhile, investigator-initiated efforts are spearheaded by Moffitt Cancer Center and Roswell Park, which are two of only 33 leading institutions in the U.S. participating in the National Comprehensive Cancer Network.
Figure 1. CRISPR Therapeutics pipeline, Q1 2023
SCD and TDT are distinct diseases caused by different genetic mutations in the hemoglobin ("Hb") gene that causes the red blood cells to be less efficient in carrying oxygen. In TDT, the body produces less of the Hb subunit beta. SCD leads to the formation of abnormal Hb S that cause red blood cells (RBCs) to stiffen and form the characteristic sickle shape. Both conditions can lead to severe anemia. Patients with TDT usually require regular blood transfusions to maintain their Hb levels. In SCD, the sickle-shaped RBCs can clog capillaries, causing progressive and often fatal cardiovascular, renal, and eye complications, including the common and painful vaso-occlusive crisis ((VOC)).
Potential functional cure may be possible with exa-cel, which bears the FDA's Regenerative Medicine Advanced Therapy designation. This includes all the benefits of the Fast Track (Accelerated Approval, Priority Review, and Rolling Review) and Breakthrough Therapy designation programs. At this stage, getting the Priority Review will be beneficial. The FDA also granted RMAT to CTX110 and CTX130. The BLA/MAA submissions are supported by results from the ongoing Phase 3 studies, CLIMB-111 and CLIMB-121. The latest data from the Phase 3 studies was presented at the American Society of Hematology 2022 Annual Meeting in December and showed that exa-cel eliminated SDC-induced VOC, as well as the need for RBC transfusions in TDT (Figure 2).
Figure 2. exa-cel data across 75 patients as of February 2022
At the Bank of America Securities 2023 Health Care Conference on May 9, CEO Sam Kulkarni said it was too early to comment on SCD pricing, but roughly estimated a U.S. total addressable market of $50 billion based on a $2 million tag by the Institute for Clinical and Economic Review (ICER). ICER is a private entity that creates cost analysis reports used by insurance companies to deny access for patients to expensive medical treatments. Their model assumed average cost of $5,762 per VOC and that patients with severe SCD on standard of care (SoC) would have four VOCs per year (or 93 VOCs over their lifetime), which would be avoided by gene therapy. The report also assumed the market would be split between exa-cel and bluebird bio's ( BLUE ) lovo-cel, a likely scenario since the rival BLA was submitted on April 24 .
For what it's worth, ICER also assigned a better Evidence Rating of B+ to lovo-cel due to more extensive experience and larger clinical trial sample sizes than exa-cel (C++). In other words, lovo-cel is expected to provide at least an incremental net benefit compared with SoC, while exa-cel may at worst be comparable to SoC, although it's possible that either/both could provide a substantial net health benefit. In TDT, exa-cel would have to battle bluebird bio's ZYNTEGLO, which at one point was the most expensive medicine in history at $2.8 million . This was well above ICER's $1.9 million cost-effective limit.
Finances and takeaways
Cash and securities were $1.9 billion as of March 31, 2023 and net loss was only $53.1 million for Q1 2023, so there is no danger of dilution in the near future. Under the Vertex Joint Development Collaboration Agreement, CRISPR Therapeutics is eligible to receive a one-time $200 million milestone payment upon the first marketing approval of the initial product candidate from the FDA or the European Commission, while net profits and net losses will be allocated 40% to CRISPR and 60% to Vertex. Once the FDA officially accepts the BLA, they will determine the Prescription Drug User Fee Act (PDUFA) date, and whether an advisory committee meeting is necessary or not. The time frame for the Agency to file the BLA for review is typically within 60 days of receipt. Therefore, traders can wait until June 2 or use options expiring on or after that date.
For further details see:
Crispr Therapeutics: Hold Until A Firmer Decision Date