Shares of CRISPR Therapeutics AG (CRSP - Free Report) rallied 15.1% on Jun 7 as Vertex Pharmaceuticals (VRTX - Free Report) announced expansion of their collaboration agreement to include new disease areas.
With the expansion of the collaboration, Vertex will get exclusive worldwide rights to CRISPR Therapeutics’ existing and future intellectual property including foundational CRISPR/Cas9 technology. Vertex is planning to discover and develop gene editing therapies targeting Duchenne muscular dystrophy (“DMD”) and Myotonic dystrophy type 1 (DM1) using CRISPR’s technology.
We remind investors that Vertex and CRISPR signed a research collaboration back to October 2015. Per this agreement, Vertex and CRISPR are developing gene editing therapies for cystic fibrosis and sickle cell disease indications. In December last year, the companies selected gene therapy, CTX001, to move into clinical development for sickle cell disease and beta thalassemia.
Per the terms of updated collaboration agreement, CRISPR is eligible to receive up to $1 billion, including $175 million in upfront payment and potential research, development, regulatory, and commercial milestone payments for DMD and DM1 programs. The payments terms are likely to boost CRISPR’s cash funds significantly.
With no marketed product, CRISPR is solely dependent on milestone payments for revenues. The expanded collaboration with Vertex will boost the potential for revenue income in the future quarters. The increase in income will also fund CRISPR plannned initiation of early-stage immuno-oncology studies to evaluate its CAR-T cell therapy candidates, CTX110 and CTX120, for treating CD19+ malignancies and multiple myeloma, respectively.
Moreover, CRISPR will bear no cost related to development and commercialization of candidates in DMD and DM1 programs except for a specified guide RNA research related to DM1 program. All research, development, manufacturing, and commercialization activities and related costs will be borne by Vertex, while both the companies will share cost for the specified guide RNA research.
The updated collaboration is likely to be finalized by the third quarter of 2019.
Apart from the Vertex collaboration, CRSIPR also has a joint venture with Bayer AG (BAYRY - Free Report) for developing new therapies using its gene editing technology to cure blood disorders, blindness and congenital heart disease.
CRISPR’s share have increased 4.7% so far this year compared with the industry’s increase of 1.8%.
Other than CRISPR Therapeutics, Intellia Therapeutics and Editas Medicine, Inc (EDIT - Free Report) plan to carry out clinical studies using CRISPR Cas9 to cure diseases.
CRISPR Therapeutics currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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