Important Update on Our Genetic-Editing Stocks

By Jeff Brown on February 16, 2017

Yesterday, there was a major development for our three genetic-editing stocks Editas Medicine (EDIT), Intellia Therapeutics (NTLA), and CRISPR Therapeutics (CRSP).

As I’ve written about in the past, there has been an ongoing patent interference case levied by the University of California, Berkeley against the Broad Institute (Harvard & MIT) over the foundational patents for the genetic-editing technology CRISPR-Cas9.

The case has been complex, and there is far too much detail to possibly share in this update. (You can read more about the case in the October issue.) But at a high level, UC Berkeley claimed that its patents were expansive and covered all applications of CRISPR-Cas9… including all of the work that the Broad Institute has patented.

This case has been affecting the valuations of Editas, Intellia, and CRISPR because Editas has exclusive licenses to the Broad Institute’s patents while Intellia and CRISPR have access to the patents issued by UC Berkeley. In short, the patent interference has been holding back the industry. This is one of the key reasons we have been able to establish positions in these transformational companies so cheaply.

When I recommended these companies, I told you the case could potentially take a few years to work itself out. But a ruling has come much sooner than expected. On Wednesday, the U.S. Patent Trial and Appeal Board ruled that both parties did not have overlapping claims.

I believe this is the best outcome for all three parties. It essentially means that each company can pursue its current line of research and move on from the patent interference case.

The initial reactions from Intellia and CRISPR were that they will pursue other means to defend their patents. But I feel even more strongly about my original prediction than ever. I believe the three companies will enter into a cross-licensing deal for their intellectual properties, settle the disputes, and get on with their businesses.

In the short term, the market has reacted strongly in Editas’ favor. The stock closed up 28.7% on the day. Meanwhile, CRISPR and Intellia were down for the day, by 7.5% and 7.3% respectively. But I don’t expect the weakness to last long. The market is so massive that there are billions of dollars of opportunity for each of the three players to pursue. I estimate the total market opportunity for therapies derived from CRISPR-Cas9 genetic editing to exceed $1 trillion. In short, there is much more to come in the genetic-editing story. We are just getting started.

So use the current weakness to buy CRISPR and Intellia if you haven’t already.

Editas Medicine (EDIT) is a hold.
CRISPR Therapeutics (CRSP) is a buy up to $20.
Intellia Therapeutics (NTLA) is a buy up to $22.


Jeff Brown
Editor, Exponential Tech Investor

©  Bonner & Partners, 55 NE 5th Avenue Suite 100, Delray Beach, FL 33483, USA. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from the publisher.

Information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not designed to meet your personal financial situation – we are not investment advisors nor do we give personalized investment advice. The opinions expressed herein are those of the publisher and are subject to change without notice. It may become outdated and there is no obligation to update any such information.

Investments recommended in our publications should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. You shouldn't make any financial decision based solely on what you read here. 

Bonner & Partners writers and publications do not take compensation in any form for covering those securities or commodities.

Bonner & Partners expressly forbids its writers from owning or having a financial interest in any security that they recommend to their readers. Furthermore, all other employees and agents of Bonner & Partners and its affiliate companies must wait 24 hours before following an initial recommendation published on the Internet, or 72 hours after a printed publication is mailed.