An icy March wind was blowing across the Charles River, but in the laboratory of Intellia Therapeutics, the 1970s soft-rock hit “Summer Breeze” was blasting. Chief scientific officer Tom Barnes apologized. “Usually it’s heavy metal,” he said. He pointed out a window to a local tower, visible over the Cambridge, MA rooftops, rising from a nearby neighborhood. Intellia’s new offices were somewhere near there, out of our line of sight.
The two year old company’s more fateful impending move is a push to go public. Its IPO is scheduled for next week. That means the company, working to create new medicines with arguably the biggest biomedical innovation of the 21st century—the groundbreaking form of gene editing called CRISPR-Cas9—must convince investors to bet on its future even though it lacks what so many biotech investors crave: data from human clinical trials. What will CRISPR-Cas9 do when it gets into human cells and changes their DNA?
Intellia indicated in regulatory filings Wednesday it wants to raise $85 million in an IPO, plus a few million more if all goes well. There are indications that, beyond a small circle of sophisticated biotech investors, the public might be hesitant to buy into CRISPR-Cas9. Intellia’s competitor Editas Medicine, also of Cambridge, went public earlier this year. Also lacking human data—its first clinical trial is slated for 2017—Editas (NASDAQ: EDIT) netted $98 million in its February IPO. But more than half of the 6.8 million Editas shares purchased went to insiders—that is, groups that already owned significant blocks of shares before the IPO.
Intellia will likely sell to a lot of familiar faces, too. In its latest filings, the company said insiders want to buy about $30 million worth of shares in the IPO. Intellia will also sell $50 million and $5 million in stock, respectively, to its corporate partners Regeneron Pharmaceuticals (NASDAQ: REGN) and Novartis (NYSE: NVS) on the side.
Insiders wanting more isn’t necessarily a bad thing. In previous bear markets, some good companies have jumped through the IPO window with a little help from their friends. Problem is, it’s hard to tell if Intellia—and Editas before it—are companies that will pay off for investors. They are working about as far out on the cutting edge of biomedical science as possible. They, their corporate partners, and one other company, Crispr Therapeutics, are racing toward the clinic, though none has yet tested an experimental drug in humans. Crispr, with offices both in the U.K. and Massachusetts, might soon join the IPO queue, having raised nearly $100 million in private funds and sealed two big partnerships.
But betting on biotech without human data to provide even an early signal of how a company’s top product might perform is like betting on a flying rental car company without seeing a single prototype lift off. Not that it’s unprecedented. Every so often, a biotech manages to go public without clinical data. The bull run that finally ended last year saw a few, including Verastem (NASDAQ: [[ticker:VSTM]), Blueprint Medicines (NASDAQ: [[BPMC]]), and Dicerna Pharmaceuticals (NASDAQ: DRNA).
But the lack of clinical results from any CRISPR-Cas9 therapy widens the blind spot. Add to that the great scientific, medical, and ethical unknowns of gene editing, and it’s about as risky a bet a fund manager can make. One company so far, Sangamo Biosciences (NASDAQ: SGMO) has advanced a gene editing therapy into human clinical trials, but with a different technology than CRISPR. Sangamo has been working on its own method, called zinc finger nucleases, for two decades. By contrast, CRISPR-Cas9, as currently imagined, wasn’t discovered until 2012. (It stands for “clustered regularly-interspaced short palindromic repeats” and Cas9 for the “CRISPR-associated” proteins, or enzymes, that do the cutting.)
“We’re still at the tip of the iceberg in understanding double-stranded break repair,” said Intellia CEO Nessan Bermingham, referring to a cell’s process to fix breaks in DNA. That process lies at the core of how CRISPR-Cas9 therapies are supposed to work. Double stranded breaks happen naturally in our DNA all the time, and cells typically deal with them without a problem. When they go awry, however, bad things like cancer happen. The goal of gene editing—either with CRISPR-Cas9, zinc fingers, or another system called TALENs (short for or transcription activator-like effector nucleases)—is to artificially make a cut at the spot where a cell has a defective gene. The cut, it is expected, will trigger the cell’s natural processes to delete the defect or replace it with a healthy gene.
It’s not just our basic understanding of how cells repair themselves that’s new. Many key parts of the gene-editing toolkit to fight or cure diseases are recent developments. One example: scientists often use modified viruses to ferry genetic material into cells. Such viruses might also be candidates to deliver CRISPR-Cas9, too. The adeno-associated virus, or AAV, is the most widely used, but only in recent years have researchers teased out which types (there are 11) prefer to “infect” which kinds of cells. This kind of preference, called tropism, could be harnessed to aim drugs into specific tissues, once it’s well understood.
Even so, CRISPR-Cas9 development is moving faster than anyone ever expected, with startling jumps
measured in months, not years. (One could say about any recent development, “Oh, that’s so October,” joked Editas chief technology officer Vic Myer.)
Already used in labs across the world to alter the genes of practically every organism, CRISPR-Cas9 is, as many people have said, the democratization of gene editing, because it is much easier to use than zinc fingers and TALENs. One sign of its progress is that the first programs to reach the clinic could be what were once considered the far horizon. They are close enough, in fact, that they are among the programs Intellia and Editas have chosen to keep wholly owned.
Both have bigger partners that want to use CRISPR-Cas9 to make edits in cells that are extracted from a patient’s body, modified ex-vivo, then reinserted into the patient with hopes of curing a blood-borne disease. (Intellia’s partner is Novartis, and Editas has teamed up with Seattle’s Juno Therapeutics.) But the biotechs have reserved for themselves in vivo applications–the trick of sending the CRISPR-Cas9 scissors into the body to find the right cells and make the right cuts.
It’s a more complicated proposition than ex vivo modification. When CRISPR-Cas9 burst onto the biomedical scene three years ago, many observers figured the ex vivo applications would reach the clinic first.
That still might come true. Crispr Therapeutics CEO Rodger Novak predicted recently that some academic centers with biotech-like resources might start ex vivo clinical trials by the end of 2017. But at least one gauntlet has been thrown on the side of in vivo therapies. Editas said last year its in vivo program to correct a rare form of blindness could start clinical trials in 2017.
Intellia is going full-bore after diseases that start in the liver. Getting drugs to the liver without causing mischief or getting intercepted by the immune system is trickier than an injection into the eye, but Intellia has its reasons. The liver is the Rome of the body. All roads—or all blood vessels—eventually lead to the liver, so anything injected into the bloodstream, if constructed carefully enough, should get there. There are also myriad liver diseases. Intellia has prioritized four: Transthyretin amyloidosis (ATTR), a joint effort with Regeneron; alpha-1 antitrypsin deficiency; hepatitis B infection; and inborn errors of metabolism.
The fourth on that list isn’t one disease, it’s a grouping of rare diseases caused by a single gene gone awry. But going after inborn errors raises some of the most critical questions for Intellia, or for any company looking to deliver personalized medicine in a society where the regulatory and financial structures might not be ready to handle it.
Many of the inborn error diseases have only tens of patients, not hundreds or thousands. Viewed on a bar chart of liver diseases—the higher the bar, the more patients per disease—these diseases look like a long, low tail stretching far to the right. “I want to find a way to sweep up the tail,” says Intellia chief medical officer John Leonard. “If we have a solution for a disease with 100 people, why shouldn’t we do it?”
But here’s the problem. There might be so few patients, that a clinical trial would essentially have to involve most of them, leaving few, if any, to treat with a commercial product. And no company ever made money just by doing clinical trials. But as Sarepta Therapeutics (NASDAQ: SRPT) just found out, skimping on the trial size—it believed it could get a Duchenne muscular dystrophy drug approved with data from 10 patients—met with skepticism this week from FDA scientists and advisors. (Sarepta believed the FDA would be open-minded; a final vote on the drug is due in late May.)
As Leonard puts it, “How do we do trials if the trial is the treatment?” Leonard speculates that Intellia would have to work with regulators essentially to re-use data from one disease to another. For example, if a trial demonstrated that a company’s core gene-editing machinery was safe in one disease, would the FDA accept it as safe in another? Instead of starting each program from scratch, Leonard would like to find a process “that what I learn on one thing is applicable somehow to the next thing. I have no idea how the FDA feels about this.”
The very reason CRISPR-Cas9 is easy to use could eventually be a factor. Its molecular “scissors”—the cutting enzyme Cas9—stay the same in therapies for different diseases. What changes in a therapy, depending on the gene being targeted, are the guides: the strands of manufactured RNA that match up with the target and show Cas9 where to snip. It’s theoretically one less new component to test for each new drug program. Could that lessen the clinical expense, or lower the number of people needed for a trial?
It’s hard to say, but philosophical shifts in the way certain drugs are regulated will likely be necessary.
Leonard is optimistic that a different question, just as crucial, has already met with a favorable outlook at FDA: How do you prove to the agency that what was
science fiction not long ago—an alteration of someone’s DNA that, by the way, is irreversible—can proceed safely into human testing? With its zinc fingers, Sangamo has paved the way, he says. It has a treatment for HIV in a Phase 2 trial, and in recent months received clearance to start trials in hemophilia B and the rare mucopolysaccharidosis Type I.
“Sangamo has demonstrated that you can work with the FDA to come up with a body of evidence” that the gene editing machinery isn’t going astray once inside the body and cutting DNA in the wrong spots, said Leonard. There’s a debate right now—perhaps “raging” is too strong a word, but certainly passionate—whether the field has the right tools to detect these off-target cuts, and what fine-grained level of detection is necessary to make sure CRISPR-Cas9 is safe. Keith Joung, a pathologist and DNA researcher at Massachusetts General Hospital in Boston and cofounder of Editas, is developing one of those detection systems; he told Xconomy earlier this year that even more sensitive detection is necessary.
That kind of talk “drives me up the wall,” Crispr Therapeutics CEO Novak told me the week after I spoke with Joung. It loses sight of the “so what” question, said Novak: Not how many cuts are taking place, but are they creating a real risk of cancer? Or are they cuts that our cells could deal with on an everyday basis?
The debate is important because a previous generation of gene therapy was brought to a halt by treatments gone awry. In France and the U.K. last decade, experimental treatments to cure X-linked severe combined immune deficiency disorder (the “bubble boy disease”) triggered leukemia in at least five children, and in 1999, teenager Jesse Gelsinger died while being treated for a genetic liver disease in a trial at the University of Pennsylvania. Any similar catastrophes with gene editing, whether CRISPR-Cas9 or other systems, could be devastating to the whole field, especially as the public begins to grapple with the profound potential of these new biological tools.
With one eye on safety, Intellia has decided to send CRISPR-Cas9 into the liver by wrapping it, essentially, in tiny droplets of fat. (The technical term is lipid nanoparticles, or LNPs.) There are other delivery vehicles available, such as AAV modified viruses, but Intellia has chosen LNPs, even though other companies using them to deliver experimental medicines to patients have had problems. “It’s fair to say that LNPs in the clinic have had some liabilities,” says David Morrissey, Intellia’s chief technology officer, who previously ran an RNA group at Novartis. He knows LNPs intimately. The ones he helped develop at Novartis are now in Intellia’s hands. Many drug developers have used LNPs to try to deliver short RNA strands, similar to the CRISPR-Cas9 guides, into cells. Their function can be to interrupt production of disease-causing proteins, either coming from a defective gene or an invading virus. Or the RNA strands can help cells produce beneficial proteins. None of these RNA drugs has been approved.
Injected over and over again, the LNPs might build up in cells and cause damage. But with a CRISPR-Cas9 therapy, which if successful would require one or at most a few doses, Intellia is betting it can avoid safety problems while reaping the advantages of LNPs, like a lower manufacturing cost than other drug delivery vehicles.
Although Intellia and Editas gave fair warning in their regulatory filings about the risk of ethical concerns blunting their business, CRISPR-Cas9 drug development is by and large separate from the “designer baby” fears that turned CRISPR-Cas9 into a headline last year and spurred an international summit of top scientists.
Intellia, its peers, and collaborators are working on editing somatic, or, mature cells, not the germline of eggs, sperm, and embryos that would allow changes to pass down to future generations. Yet with human testing of CRISPR-Cas9 therapies likely a matter of when, not if, there are other ethical questions to ponder. For example, what if someone tests positive for an allele—a version of a gene—that indicates a high risk of early Alzheimer’s or aggressive breast cancer, but the person shows no symptoms of the disease? If the risk is high but not 100 percent, should that gene be edited out? Who should pay for the treatment?
If those situations arise, it’s possible that drug access and pricing, which many people in the U.S. are eager to overhaul, will look radically different.
But those are distant horizons. Companies like Intellia first must show that the life-changing medicines they’re working on are not as far out as once imagined. Asking the public to support that work, as Intellia will do next week, is just one step toward that goal.