CRISPR-related stocks sink after report that gene-editing technology might cause cancer

Shares of gene-therapy companies sank in active trade Monday, after a STAT report that editing a cell’s genome with CRISPR/Cas9 technology might cause cancer.

CRISPR, or clustered regularly interspaced short palindromic repeats, is a gene-editing technique that uses the Cas9 enyzme to make precise changes to genes associated with specific diseases. The STAT report said studies by scientists, which were published in Nature Medicine, found cells that had their genomes altered using the CRISPR/Cas9 method had the potential to seed tumors inside a patient.

Switzerland-based CRISPR Therapeutics AG’s stock

CRSP, -0.94%

 plunged 12.6% with volume ballooning to 8.3 million shares— almost five-times the full-day average of 1.7 million shares.

CRISPR Therapeutics’ Chief Executive Samarth Kulkarni was quoted in the STAT report as saying the results of the studies were plausible. The company did not respond to a MarketWatch request for comment.

Shares of Intellia Therapeutics Inc.

NTLA, +3.20%

which is also a genome-editing company using the CRISPR/Cas9 system, tumbled 9.8%. Volume of 2.8 million shares was more than triple the full-day average.

In an emailed statement to MarketWatch responding to the STAT report, Intellia said: “We’ve observed no signs of this type of toxicity or cells transforming into cancer or tumors in Intellia’s ‘in vivo’ and ‘ex vivo’ programs.” (In vivo refers to genes edited within the body, and ex vivo are genes edited outside the body, then reinserted.)

“Despite extended observation in animals and ‘in vitro’ cultures, we have not seen this effect,” Intellia said. “Intellia’s current approaches are directed at different cell types.”

Elsewhere, shares of Editas Medicine Inc.

EDIT, -0.03%

which also focuses on CRISPR/Cas9 technology for genome editing, slumped 7.8% on volume of 4.5 million shares, which was more than 4-times the full-day average.

The STAT report said the CRISPR/Cas9 process induced the cell to activate a gene called p53 to mend the DNA break, or makes the cell self-destruct. If the cells survive the p53 edits, they do so because they have a dysfunctional p53 gene, which can cause cancer.

“For making medicines, we believe inhibiting p53 to increase HDR [homologous damage repair] is not appropriate or needed as it could allow the accumulation of unwanted mutations from non-CRISPR mechanisms, and we can now achieve much higher targeted integration rates and gene correction without suppressing p53 than the authors of this paper saw in their experiment,” Editas said in a statement emailed to MarketWatch.

This isn’t the first time gene therapy stocks were hurt after scientists revealed safety concerns. In January, the stocks slumped after a University Pennsylvania professor said animals used in an trial were sent into toxic crisis when given a high-dose delivery of a corrective gene.

Don’t miss: Three amazing (and possibly disturbing) medical innovations are here today.

Despite the selloff, the CRISPR technology stocks were still up sharply so far this year. CRISPR Therapeutics’ stock has more than doubled, up 154%, while Intellia shares have run up 28% and Editas’s stock has climbed 18%. In comparison, the iShares Nasdaq Biotechnology exchange-traded fund

IBB, +0.30%

 has gained 3.0% and the S&P 500 index

SPX, +0.08%

 has tacked on 4.1% year to date.

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