What is a Better Investment: Intellia Therapeutics or Editas Medicine?
Both of these companies develop therapies using CRISPR gene editing tech, but which is the better investment, Intellia or Editas?
June 30, 2021

Both of these biotech companies made their stock market debut in 2016 and both utilize CRISPR gene editing technology in their therapies. Both also haven't got a product on the market and are not yet profitable. The two clinical-stage companies do have pending results from their current leading products both later this month and by year's end. Which is the better investment, Intellia Therapeutics (NASDAQ: NTLA) or Editas Medicine (NASDAQ: EDIT)?

Intellia Therapeutics: bull vs bear arguments:

Intellia has no revenue or earnings to speak of but what it does have is potential and the market is responding accordingly as the company's stock price is up over 55% year-to-date (YTD). The company also has a long enough cash runway while its therapies go through trials and await approval. With zero debt and nearly $585 million in cash, the company has at least 5 years of smooth sailing with annual cash burn averaging roughly $70 million; by which time, it expects to start making sales.

This is where Intellia is expected to shine with such a broad range of products covering an array of illnesses in its pipeline. The company is the first to offer in vivo gene editing in its products rather than medicines created outside of the body using stem cells and re-inserted. Its most advanced in the release stage is NTLA-2001 to treat transthyretin (ATTR) amyloidosis (abnormal protein buildup) with one treatment rather than the existing option of chronic, lifelong administration; early results will be announced within the week. It has partnered with Regeneron on this endeavor and Novartis on an ex vivo sickle cell program.

The problem of course is, what if this product doesn't work? CRISPR tech is only 12-years old and has yet to be successful. Intellia's stock price is currently near its 52-week high and the success of its product is fortified into that very high valuation. Should results be negative, expect a severe correction.

Editas Medicine: bull vs bear arguments:

Editas is in a similar financial position to Intellia and is also betting on its pipeline and intellectual property, which includes 200 patents and 800 pending review. Its most advanced-stage products are EDIT-101, for Leber congenital amaurosis 10 (LCA10), which causes infant blindness, and EDIT-301 for blood disorders sickle cell disease (SCD) and Beta Thalassemia. Both have a potential to make astronomical sums in the total addressable market (TAM) for these illnesses. 

While the company goes through clinical trials and awaits approval, it has some revenue coming in from collaborative efforts with Juno Therapeutics to the tune of $6.5 million, up nearly 14% year-over-year (YoY). It also has no debt and over $720 million cash, leaving it with a 3.5-year runway until it awaits approval. 

As with the pros, the cons are the same for this company. What if it fails? That aside, the company's stock price is down 43% YTD for a number of reasons, not the least of which is share dilution with its latest offering of 5 million shares of stock. At the beginning of the year, Editas' Chief Scientific officer left his post followed by the CEO a month later with little explanation. Not a good look for a company dealing with bleeding-edge tech.

So, which is the better buy?

Both of these companies are very risky but warrant consideration if only for the fact that the market is so optimistic about them both. This is evidenced in the fact that Intellia's institutional ownership is nearly 95% and Editas' nearly 80%. Being an optimist myself, I would take a very small position in either, but if a choice must be made, I'd go with the less expensive Editas.

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