In the current environment, companies may do better staying private than going public.
But Prime Medicine may be able to ride strong optimism about gene editing to buck that conventional wisdom. The genetic-medicines company has filed paperwork for an initial public offering.
Prime is developing a third-generation DNA-editing technology called prime editing. It's the only company to pursue the approach, which was developed in the academic laboratory of Dr. David Liu.
The synthetic-biology rockstar was a technical founder of first-generation gene-editing pioneer Editas Medicine (EDIT) and second-generation base-editing pioneer Beam Therapeutics (BEAM).
Hurt by operational missteps and poor execution, Editas Medicine coughed up a huge lead in first-generation Crispr gene editing to latecomers.
Beam has garnered a lot of attention but boasts an underwhelming pipeline with considerable overlap to the competitive landscape.
Could the third time be the charm for Liu?
The Many Ways to Edit a Genome
Many investors became interested in genomics stocks during 2020 and 2021. But that term is sloppy and inefficient. It dismisses important nuances, risks grouping companies that shouldn't be in the same comparisons, and has become so overused as to lose all meaning. Better to be more precise.
The lack of linguistic precision also becomes a problem when discussing investments in DNA editing, which in the context of drug development is the process of altering a patient's genome to treat a disease.
The most accurate way to group these tools is by the generation of the technology.
- First-generation tools such as Crispr gene editing can precisely home in on specific parts of a genome, but they make relatively imprecise edits. These tools also require breaking apart both strands of the double-stranded genome, which increases risks such as developing cancer. Another prominent figure in synthetic biology, Dr. George Church, was spot on when he likened Crispr gene editing to a "blunt axe."
- Second-generation tools such as Crispr base editing can precisely home in on specific parts of a genome down to a single base pair. These tools don't require making any breaks to the double-stranded genome, which avoids many risks of earlier tools now in clinical development. The mechanics of base editing still present risks, such as bystander edits (lingering near the edit site and accidentally editing nearby parts of a gene), although Liu has told me these can be mitigated relatively easily.
- Third-generation tools such as Crispr prime editing can do everything prior-generation tools promise but with more precision. Prime editing theoretically can remove faulty genetic material, insert new genetic material, change genetic material, and any combination of these tricks.
Although Crispr systems are the most widely used and widely known DNA-editing tools, they're far from the only ones.
Precision BioSciences (DTIL) is developing Arcus gene-editing and Arcus base-editing tools. Cellectis (CLLS) is developing Talen gene-editing and Talen base-editing tools.
Meanwhile, third-generation tools such as peptide nucleic acids and engineered transposons could give prime editing serious competition over the course of this decade.
Nonetheless, any tool associated with Crispr and Dr. Liu is going to cause a stir. It may be deserved in this case.
The Ups and Downs of Prime Editing
Prime Medicine remains at least 12 months away from starting a clinical trial, but the drug developer has a focused therapeutic pipeline.
Whereas most first- and second-generation DNA-editing companies have carved out space for engineering cell-therapy candidates in oncology, the newcomer doesn't currently plan to develop cancer treatments. That's a potential advantage considering the high levels of overlap, limited differentiation among existing pipelines, and high likelihood of clinical and commercial failure of gene-edited oncology tools.
Although the startup's most advanced drug candidate suffers from overlap -- yet another experimental therapy for sickle-cell disease -- many of the company's programs are unique compared with rival DNA-editing pipelines. There's some overlap in disease targets compared with other next-generation genetic medicines, but prime editing could provide important advantages.
This is all not to say that prime editing has no downside.
One of the primary drawbacks of enzymatic tools such as Crispr, Arcus and Talen is the relatively bulky size of the drug payloads. Enzymes are very large molecules, so requiring one to make a drug candidate function greatly increases the size of the drug payload.
Prime editing requires not one enzyme, but two. The bulkier the payload, the more difficult it may be to shuttle around the body and into specific cell types where DNA editing needs to occur.
The latter point is important not to overlook. Health and disease are caused by the genes you express, not by the genes you possess. However, not all genes are active in all cells. DNA editors must be delivered into the cells where genes are expressed in a specific disease.
Whereas most genetic medicines to date have focused on delivery to and gene expression within the liver, many diseases require genetic corrections in other parts of the body.
For example, Prime Medicine is developing a drug candidate for myotonic dystrophy type 1, but will likely need to develop tools that deliver DNA editing payloads to muscle, heart, and brain tissue simultaneously.
Prime editors cannot cross into the brain when administered to a patient through an IV, which immediately scratches one important tissue type off the list. Getting into the muscle and heart tissues at the same time could prove difficult, especially for such a bulky payload.
In other words, once initial clinical results roll in, the hype around prime editing could quickly fizzle.
A Different Take on DNA Editing
There are challenges and opportunities for every genetic medicine platform. Crispr prime editing, or at least the approach Prime Medicine has taken, distinguishes itself from other pipelines across the industry.
Of course, investors still must be mindful of valuation risks. Prime Medicine is likely to earn a significant premium to drug developers of similar maturity. That could expose your portfolio to losses if delays or inevitable clinical failures strike.
It's also worth keeping an eye on promising challengers to Crispr's DNA-editing oligopoly, such as Tessera Therapeutics, Metagenomi, and others.
Prime Medicine is an interesting potential genomics stock to watch, but it's not an automatic purchase for individual investors. Don't forget that you invest in businesses, not technologies. The dust on this one has yet to settle.
