To an outside observer, it might seem like the cards are unfairly stacked against Verve Therapeutics (NASDAQ: VERV). The clinical-stage biotechnology stock is developing one-and-done therapies that employ a twist on CRISPR-based gene editing.
Verve Therapeutics’ most advanced new treatment candidate, VERVE-101, produced positive results in its first clinical trial. Inexperienced biotechnology investors were dealt a painful lesson, though, when the stock tanked more than 40% in response to the seemingly great news.
If Verve Therapeutics’ dramatic stock price activity left your head spinning, you’re not alone. Let’s take a closer look at what happened so it isn’t so easy to get caught off guard in the future.
Verve Therapeutics’ new gene therapy candidates alter a patient’s DNA with base-editing techniques that are a little bit like using a pencil and eraser. This should lead to fewer unintended effects compared to techniques employed by CRISPR Therapeutics that function more like a pair of scissors.
On Nov. 12, Verve announced interim phase 1 trial data for VERVE-101. This is an experimental base-editing therapy that limits the production of PCSK9, a protein that controls liver cell receptors that remove cholesterol from the blood.
Turning off the production of PCSK9 with VERVE-101 should lead to lower cholesterol for patients in the study who are genetically predisposed to have high cholesterol. One month after a single treatment, investigators measured LDL cholesterol reductions between 47% and 84% among the three patients given the two strongest doses tested.
Despite strongly positive efficacy results, shares of Verve Therapeutics tanked more than 40% when the market opened on Nov. 13.
There were no issues on the safety front that clearly indicate trouble ahead for VERVE-101 but the initial portion of the study was less than flawless. One patient receiving a low, sub-therapeutic dose died of heart failure five weeks after receiving the drug. Another patient experienced a non-fatal heart attack the day after treatment.
Both incidents were determined to be unrelated to treatment with VERVE-101 by the trial’s independent safety monitoring board. Unfortunately, one-and-done treatments meant to last forever will be held to stricter safety standards than traditional drugs because you can’t just stop taking them.
Unfortunately for Verve Therapeutics investors, Novartis has an approved PCSK9 drug that gets injected just twice a year called Leqvio. In August, Novartis demonstrated that Leqvio safely kept LDL cholesterol levels down by about 50% for hundreds of patients who have been monitored for more than three years. With a very manageable dosage schedule and similar efficacy results to VERVE-101, competing with Leqvio could be an uphill battle.
Investors waiting for significant drug sales from Verve Therapeutics shouldn’t hold their breath. It has been seven years since CRISPR Therapeutics went public with promises to develop new gene editing therapies. The gene-editing pioneer is getting close with exa-cel, but the U.S. Food and Drug Administration (FDA) still hasn’t approved any CRISPR-based gene therapies from this or a slew of less advanced companies with similar technology.
On or before Dec. 8, the FDA is expected to issue an approval decision regarding exa-cel that Verve Therapeutics investors want to keep an eye on. While approval to treat severe sickle cell disease is widely expected, the agency could decide it doesn’t know enough about exa-cel’s long-term effects yet and make VERVE-101’s timeline even less certain than it is already.
It’s not clear when Verve Therapeutics will have a drug to sell, but at least it has a big pharma partner that can fund late-stage development of its pipeline.
Verve Therapeutics licensed some of the base-editing technology VERVE-101 is based on from Beam Therapeutics. In October, Verve’s collaboration partner, Eli Lilly, handed Beam $250 million upfront for rights to co-develop and co-commercialize VERVE-101 plus multiple earlier-stage programs aimed at cardiovascular targets.
Beam’s windfall won’t go to Verve Therapeutics directly but it suggests Eli Lilly is ready to step in with buckets of capital if VERVE-101 or an earlier-stage candidate shows promise. Now probably isn’t a good time to buy the stock, but hanging on if you already own shares looks like the right move.
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