Gene editing technology is extremely popular right now within the biotech industry. The gene editing market is expected to reach a value of $9.2 billion by 2026 and can potentially be used to treat numerous types of diseases within humans by editing their DNA. There are currently efforts to combine the discoveries and research made within the gene-editing field in order to develop genome-edited, off-the-shelf immune cell therapies for the treatment of cancer. The oncology industry is the most valuable market in all of medicine and is currently valued at $136.7 billion, so companies that are leading the way in innovative treatments for cancer have huge potential value for investors. One of these companies is Caribou Biosciences ($CRBU), who are trying to use genome editing to develop sophisticated cell therapies to treat a variety of malignancies. This company came into existence in 2011, and after ten years of research and growth they have yet to develop a product that has been sold commercially. In fact, their most advanced cell therapy is only in phase 1 of its clinical trials. Despite this lack of revenue, in July of 2021 Caribou Biosciences was able to raise $304 million in an initial public offering, which is one of the most lucrative IPOs in the gene-editing industry’s history. This ten-year-old company could be the most successful gene editing stock in its industry if its product pipeline yields saleable products.
Genesis of a Gene Editing Company
Caribou Biosciences has been founded and built by some of the most notable names in the gene editing industry. The most noteworthy of these names is Jennifer Doudna. Doudna was awarded the Nobel Prize in Chemistry in 2020 for her discoveries and work with CRISPR genome editing. She is credited by many as the co-inventor of CRISPR. After cementing her name in this field, Doudna co-founded Caribou Biosciences along with its current CEO Rachel Haurwitz, and Doudna still serves on its scientific advisory board. Having a reputable and capable board of directors and upper management group is the cornerstone for any successful biotech company. Caribou Biosciences has been established and operated by household names in the medical industry. This type of prestige has been enough to help net Caribou Biosciences partnerships with larger companies, which is usually a difficult task for clinical stage companies. In February of 2021, Caribou Biosciences announced a collaboration and licensing agreement with AbbVie Inc. ($ABBV) which provides Caribou with $40 million upfront in cash and equity investments and the potential to receive $300 million in development, regulatory, and launch milestones. Creating partnerships with industry giants is another step that is often seen on a company’s path towards blockbuster status. Their successful IPO along with their lucrative partnerships has ensured Caribou’s funding for the foreseeable future. A clinical stage company with credibility and stature is rare to come by, but Caribou Biosciences has convinced both its industry partners and its investors that it is capable of dominating its portion of the industry.
With this funding and expertise, Caribou Biosciences is attempting to enter the oncology industry through the use of cell therapies. Their research and development are still in its early stages but has shown signs of promise. Much of Caribou’s focus is centered around CAR-T cell therapies, which is, “a way to get immune cells called T cells (a type of white blood cell) to fight cancer by changing them in the lab so they can find and destroy cancer cells”. Their most advanced CAR-T cell therapy, CB-010, is constructed to fight B-cell non-Hodgkin’s Lymphoma. This treatment has recently been dosed in its first patient of its phase 1 study, and there should be more detailed data in 2022. Both CB-011 and CB-012 are also in the early stages of development and they each attack different forms of multiple myeloma and leukemia. In the past, CAR-T cell therapies have been extremely personalized and expensive. The process of receiving CAR-T cell therapy includes drawing blood from the patient and collecting their T cells as well as developing each CAR that is made for a specific cancer’s antigen. Caribou is attempting to develop their products so they can be off-the-shelf therapies for the treatment of both hematologic malignancies and solid tumors. This is the equivalent of selling pre-made suits as opposed to having to tailor an individual suit for each client who walks in the door.
All three of these experimental treatments are allogeneic CAR-T therapies, meaning they are made from donor cells rather than a patient’s own cells. These CAR-T therapies are used for the treatment of blood cancer, but Caribou is also trying to develop a CAR-NK therapy that can target cancer in tumors. If they can find success in the mass production of these expensive treatments their stock value could skyrocket.
Competition
Like with all biotech ventures, Caribou Biosciences is not alone in its search for an off-the-shelf CAR-T and CAR-NK therapy. Caribou Biosciences is one of many companies that is trying to revolutionize these therapies. The level of competition from companies such as Allogene ($ALLO), Bluebird Bio ($BLUE), and CRISPR Therapeutics ($CRSP) is likely the largest threat to the success of Caribou Biosciences. If one of their competitors receives approval for these genome edited cell therapies before Caribou, their likelihood of success decreases. It is crucial for Caribou to break into this market early and develop relationships with other companies for the commercialization of their product. While the competition is stiff, few companies have any competitive advantage over Caribou Biosciences. They are one of the oldest CRISPR companies and have an incredible team that is working on their products. Competition can be scary when investing in a company that is so dependent on the success of a few products, but Caribou Biosciences is one of the favorites in this competition given the time table of their operations.
Caribou’s stock has only been public for a few short weeks, but it could be a very powerful investment for one’s portfolio. In the short period of time that they have been publicly traded their share price has continued to rise. For both a short- and long-term investment, Caribou Biosciences is a worthwhile endeavor barring any signs of disapproval from the FDA. They could be a shining star within the CRISPR genome editing community, and there are few companies that are better set up for success in this industry than Caribou Biosciences.
Disclosure: The Sick Economist Owns Shares in $CRBU
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