The Food and Drug Administration placed a cancer study from Beam Therapeutics on hold Monday, leading Beam stock to drop.
Beam didn't provide any insight into the reasoning behind the FDA's decision. Beam created its treatment using base editing, a next-generation form of CRISPR gene editing. It's testing the treatment in patients with a form of leukemia.
"This is obviously negative for the stock and reiterates a high level of scrutiny from the regulators on novel technologies like gene/base editing," RBC Capital Markets analyst Luca Issi said in a report to clients. "However, we also note that the (application) was submitted at the end of June, so we assume no patients has been dosed, and it is possible that the hold is simply procedural in natural."
Still, on today's stock market, Beam stock plunged by double-digit percentages premarket. But those losses were pared somewhat and shares ended the day down 6.6% to close at 58.84.
Beam Stock: Improving On CRISPR?
Base editing could offer an improvement over CRISPR gene editing. CRISPR requires cutting both strands of DNA's double helix in order to insert, remove or change genes. But that can lead DNA to improperly "sew" itself back up. Base editing only requires a cut to one strand.
Beam is using base editing to create an off-the-shelf form of costly cancer drugs known as CAR-T. CAR-T is a powerful weapon in cancer treatment. But it requires extracting a patient's own immune cells and training them to fight cancer. The process is expensive and takes time.
Beam's approach would use donor cells. Further, it hopes to treat patients with T-cell acute lymphoblastic leukemia.
"Overall, we continue to like a technology that can elegantly edit genes with no double stranded breaks, but we remain on the sidelines given clinical proof-of-concept (is) not until next year," Issi said. He kept his sector perform and 85 price target on Beam stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
