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Bull of the Day: Editas Medicine (EDIT)

Zacks Ultimate veterans know that I have owned Editas Medicine (EDIT) for Healthcare Innovators since September of 2017 from $20. We watched shares more than double to $45 by March of 2018 on a sizable degree of hype and FOMO (fear of missing out) over the potential of CRISPR.
For more background there, see my most recent ZU report on CRISPR from October "The Greatest Discovery in the Century of Biology" (access link below).
But then reality set in with a new story every other month on the dangers of CRISPR technology. And while I was encouraged to hold the stock around $30, and not take a 50% long-term gain, the correction finally took its toll. But if you look at this six-month chart, you can see most of the recent price destruction was all about the 11% collapse in the S&P 500 from Dec 14 to 24…
And right before this, EDIT's fortunes had just improved after hitting some R&D milestones that triggered cash payments from Allergan (AGN) for their partnership in diseases of the eye.
More importantly, on November 30, the FDA accepted the company’s Investigational New Drug (IND) application for EDIT-101, an experimental CRISPR genome editing medicine being investigated for the treatment of Leber Congenital Amaurosis type 10 (LCA10).
LCA10 is a rare inherited eye disease that appears at birth or in the first few months of life. Congenital means a condition present from birth and amaurosis refers to a loss of vision not associated with a lesion. The expression of LCA can vary, because it is associated with multiple genes.
EDIT-101 is now set to be the first in vivo CRISPR medicine administered to people anywhere in the world. And this is why EDIT was one of the few green stocks during the Oct-Nov portion of the correction, especially headed into early December and the ASH conference where they were expected to present data in other experimental areas.
Editas ASH Presentations
At the annual American Society of Hematology (ASH) conference in December, Editas presented preclinical data to demonstrate expanded CRISPR genome editing strategies in hematopoietic stem cells for the treatment of sickle cell disease (SCD) and betathalassemia. Hematopoietic stem cells are the stem cells that give rise to other blood cells. This process, called haematopoiesis, occurs in the red bone marrow at the core of most bones.
Data presented at ASH 2018 demonstrated in vivo an increased production of fetal hemoglobin, which can be beneficial to patients with sickle cell disease or beta-thalassemia.
The biggest Wall Street bull on EDIT is SunTrust. After ASH, their analyst Peter Lawson said the bank's biotech team was encouraged by Editas’ systemic analysis for their hematological approach and important data flow in 2019. They reiterated a BUY rating and $45 PT on EDIT.
But that's their "base case" built upon only a 40% probability of success in 4 major pipeline targets. Their Bull and Bear cases have probability-weighted projections of $72 and $11, with $15 of value assigned to the technology platform.
This is not hard science. Assigning Bayesian probabilities to clinical trial research outcomes is just as subjective as many stock market valuation pursuits. But in Biotech, as the R&D targets moves closer into view, so do the guesstimates of future success.
The EDIT Pipeline
Editas will be presenting this week at the JPMorgan Healthcare Conference on Wednesday January 9. Here's an excellent "mind-body map" slide from their most recent investor deck…
EDIT owns most of their experimental pipeline, including the commercial rights to EDIT-101. And they have a partnership with Celgene's (CELG) JUNO unit in gene editing for T-cells.
Best of all, EDIT came out on top in the CRISPR patent wars, which was why I bought it again for my TAZR portfolio. EDIT is now full of valuable technology and IP assets/patents that could make it very attractive to big BioPharma at only a $1 billion market cap.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
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