Should You Place an Early Bet on the IPO of Gene-Splicing Pioneer Intellia?
The planned Intellia Therapeuticsinitial public offering, among four health care IPOs expected to hit the market this week, is an exciting bet on gene-editing systems. This stock presents one of the most best moneymaking opportunities you'll find right now.
True, biotech stocks can be risky, but we think is a stock you get in on early. There's a lot of investor interest in this company after archrival Editas Medicine (EDIT) - Get Reportwent public earlier this year. Let's examine the market-beating growth potential of Intellia's imminent IPO.
Intellia describes itself as a "genome editing company focused on the development of proprietary, potentially curative therapeutics utilizing a recently developed biological tool known as the CRISPR/Cas9 system." The company says this technology could transform medical treatment "permanently editing diseased genes in the human body through a single treatment course."
Intellia has said it plans to use the CRISPR/Cas9 system in two ways. In in vivo applications, the therapeutic products are delivered to target cells within the body. In ex vivo applications, cells are removed from a patient's body, modified and then returned to the patient's body.
As a company that's still finding its feet, Intellia has yet to taste profitability, but it has received votes of confidence -- and funding -- from two well-known large-cap pharmaceutical companies: Regeneron and Novartis.
The former has agreed to purchase $50 million of common stock in a private placement to be conducted at the same time as the IPO. Regeneron will also give Intellia an up-front payment of $75 million, according to the Boston Business Journal.
Meanwhile, Intellia last month revealed a partnership with Novartis that will provide $63 million in upfront and near-term research payments and up to $230 million in additional payments, according to the Boston Business Journal.
The only chink is the sheer newness of Intellia's technology. CRISPR/Cas9 gene editing is virgin territory that hasn't been proven or clinically validated for human therapeutic use.
There are other gene editing companies focused on CRISPR/Cas9 including CRISPR Therapeutics, Editas Medicine and Tracr Hematology. Poseida, Precision BioSciences and Sangamo BioSciences are also pushing the boundaries.
In the gene-editing space, Sangamo is among the few to have advanced a gene editing therapy into human clinical trials, but with a different technology than CRISPR.
It's imperative that companies like Intellia demonstrate that the life-changing medicines currently under development aren't far-fetched pipe-dreams. But CRISPR/Cas9 appears to have the potential to be highly efficent, selective and scalable.
Our verdict: At an expected IPO price of $16 to $18 per share, Intellia is a solid bet on the exciting and rapidly advancing field of gene editing.
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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
