Two Small Caps Leading the CRISPR Biotech Revolution


In the last few years, there has been a lot of media coverage and excitement about a new procedure to edit DNA called CRISPR-CAS9 (CRISPR), which stands for clustered regularly interspaced short palindromic repeats. CRISPR technology allows scientists to change or “edit” the DNA of living things.

DNA is the building block of life, it contains all the instructions for a tomato to be a tomato, and for you to be you. Errors in DNA can cause diseases, mutation, or other effects on living beings, including humans. The ability to edit DNA would allow scientists to cure diseases, and possibly even prevent diseases before they occur.

CRISPR molecules can be programmed to scan a subject’s genetic code for errors in the genetic sequence. Once those errors are found, CRISPR can cut, or repair the DNA. CRISPR is  dissolved into a liquid, and that liquid is then injected into damaged cells to try and repair them.  In all, there are roughly 6,000 diseases that are caused by faulty genetics, including cancer, ALS, and Alzheimer’s. All of these genetic defects would be potential target markets for CRISPR.

The Risks

As with any new technology, with the promise also comes risk. In September, several biotech stocks took a hit when news surfaced there were errors introduced during the CRISPR procedure. However just as quickly an error-correcting fix was discovered, and those stocks recovered.

In addition to the technological risks, there are also ethical and regulatory risks. Gene editing means that scientists are altering the very fabric of human life and in essence playing God. What if CRISPR could be used to edit the genes of an embryo to give that baby blue eyes, a high IQ, or specific sexual preference?

As this technology progresses, there could likely be legislation that addresses some of the potential moral hazards associated with gene editing. That kind of legislation could have a chilling effect on CRISPR research and development.

Small Cap CRISPR Companies

Although the big players such as Novartis (NVS:NYSE) are already investing in CRISPR research, there are small-cap companies using CRISPR technology to try and find cures for diseases.

CRSPR Therapeutics (CRSP)

CRSPR has a market cap of just over $2 billion and the stock has nearly doubled this year. The company is working in partnership with Vertex (VRTX:NASDAQ), on cures for blood-based diseases. Their CRISPR therapies target various ailments such as sickle cell anemia as well as a separate Cystic Fibrosis treatment.

Their first drug, CTX001 is set to enter clinical trials this year for thalassemia and could represent the first curative treatment accepted for this disease. The Vertex partnership also aligns with a combined focus on Cystic Fibrosis treatment. Vertex is already a leader in this field, and having a new CRISPR therapy only enhances their portfolio.

Intellia Therapeutics (NTLA)

Intellia has a market cap of $860 million, and is working in partnership with Novartis on a two component deal. The partnership is intended to develop cancer and other disease therapies using edited CAR-T cells and HSC stem-cells. The HSC stem cell program is in late stage pre-clinical development, and the CAR-T program is in pre-clinical development. The deal with Novartis is a multi-year collaboration that included $50 million in committed collaboration funding, and $18 million equity investment, up to $320 million in additional funding, per target, based on milestones.

The company also has another multi-year collaboration with Regeneron (REGN), in which the companies are developing two components. Intellia received $50 million up front for the collaboration and a $70 million equity investment from Regeneron. There is also up to $320 million in funding available per target, if Intellia meets predetermined milestones. The company’s first jointly developed compound, ATTR, is in late stage pre-clinical development.

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Ross Silver is the CEO and founder of Sylva International. Mr. Silver is a Registered Investment Advisor with over 15 years experience in equity research, investment banking, and asset management. Mr. Silver served as a consultant for the National Institutes of Health and holds a Series 65 securities license.