Is This Why Editas Medicine Is Surging Today?
Editas Medicine Inc. (NASDAQ: EDIT) is off to a great start in 2018. Shares of the fledgling gene editing biotech rose as high as 13.3% in early-morning trading on Tuesday and have since settled down to a 11.2% gain as of 3:19 p.m. EST.
Editas hasn't even issued a press release in 2018, but it looks like investors are taking a highly productive 2017 at the Food and Drug Administration as a good sign for the company's innovative therapies in development.
In 2017, the FDA's center for drug evaluation and research approved 46 new drugs, which was more than double the previous year. A more efficient, or porous, FDA decreases the odds that Editas will suffer time- and cash-consuming delays as it develops gene therapies for the treatment of rare diseases.
More importantly, though, the FDA's center for biologics evaluation and research (CBER) approved some interesting therapies, which suggests smooth sailing for Editas in the years ahead. In particular, a gene therapy called Luxturna from Spark Therapeutics that uses a virus to deliver functional copies of a mutated gene associated with blindness was highly encouraging. The FDA's new director, Scott Gottlieb, marked the occasion in December with a promise to establish "the right policy framework" to keep the approvals rolling, which is exactly what Editas Medicine's investors needed to hear.
Today's stock movement is a bit presumptuous. At the moment, Editas doesn't even have a drug in clinical trials. The company's most advanced program, EDIT-101, will address a genetic cause of blindness separate from Spark's Luxturna.
Editas plans on applying for a license to begin clinical trials around the middle of the year. While they wait for data, investors will want to keep an eye on Luxturna's launch.
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Cory Renauer has no position in any of the stocks mentioned. The Motley Fool recommends Editas Medicine. The Motley Fool has a disclosure policy.