Intellia Stock: In-Vivo Gene Editing Platform Continues To Deliver (NASDAQ:NTLA)

Intellia Therapeutics (NASDAQ:NTLA) is a great speculative biotech play to look into. The reason why I state that is because it has already established proof of concept in using its CRISPR in-vivo gene editing technology platform to go after two specific indications, which are Transthyretin Amyloidosis (ATTR) and Hereditary Angioedema (HAE). In terms of NTLA-2001 targeting ATTR, it is shaping up to possibly be a best in class treatment for it. This highly depends how later studies go, but so far so good. The use of NTLA-2001 for the treatment of patients with ATTR is being advanced with Regeneron Pharmaceuticals (REGN). The latest proof of concept data using in-vivo CRISPR/Cas9 gene editing stems from the release of results from a phase 1 study using NTLA-2002 for the treatment of patients with HAE. A single dose of both of these drugs have achieved substantial results for these patient populations. Should things continue to go well with both of these treatments, then it could initiate pivotal studies in 2023 for them. This highly depends upon the final results from the phase 1 dose escalation studies. What I laid out thus far only deals with the in-vivo gene editing platform, which has established proof of concept in two indications. However, Intellia also has another entire pipeline dedicated to ex-vivo CRISPR gene editing technology.

Results From Phase 1 Study Using NTLA-2002 For Hereditary Angioedema Reinforce Use of In-Vivo CRISPR Gene Editing Platform

Intellia Therapeutics continues to prove itself with positive results when it uses its CRISPR in-vivo gene editing technology platform. The latest proof of concept established was when it released positive interim results from a phase 1 study, using NTLA-2002 for the treatment of patients with HAE. These results were released at the American College of Allergy, Asthma & Immunology (ACAAI) 2022 Annual Scientific Meeting, which was held November 10th – 14th in Louisville, Kentucky. This phase 1 trial recruited a total of 10 adults with HAE in the dose escalation portion of the study. Dose-escalation meaning that patients were given a wide variety of doses to test for both safety and efficacy of NTLA-2002. What makes the results good is that these patients had only received one dose of NTLA-2002 and then were followed thereafter for many months. Patients were evaluated with the following doses as follows:

• 25 mg NTLA-2002 (3 patients)
• 50 mg NTLA-2002 (4 patients)
• 75 mg NTLA-2002 (3 patients)

The main thing that was measured in this study was change from baseline of value of plasma kallikrein protein. To understand why this is an important biomarker to measure for these HAE patients, it is first important to understand what this disease does.

Hereditary angioedema is a type of disease where there is an ongoing (recurrent) type of serious swelling that occurs in the patient’s body. There are many areas that can be affected by HAE, but some areas are:

• Face
• Limbs
• Airway
• Intestinal Tract

Sometimes there is a trigger that brings about an attack for an HAE patient. However, a big issue is that most of the time there is no known cause for this type of an attack to occur. These attacks they experience are painful and on average they occur about on average 3 times per month. This is a pretty large global market, which the company can go after. It is expected that the global HAE market could reach $6.5 billion by the end of 2025. The thing is that the swelling attacks observed in HAE occur because of a chain of events. The whole premise is that too much plasma kallikrein activity causes it. However, before such a phenomenon happens, there is said chain of events. The first problem that is found in HAE patients is that they don’t have enough functioning C1 esterase inhibitor in their body. This leads to an increase in plasma kallikrein levels and after that the release of bradykinin levels. Increased bradykinin levels cause blood vessels to release fluid that causes swelling and an HAE attack. There are two types of ways that the kallikrein-kinin pathway is inhibited. It is either a preventative way (prophylactic) drug or on demand HAE treatment (at time of an attack).

The goal of NTLA-2002 is to use CRISPR in-vivo knockout edit of the KLKB1 gene. With the knockout of this gene, plasma kallikrein levels are reduced greatly. In turn, that reduces the amount of HAE attacks which occur. The knocking out of the KLKB1 gene is a proven method thus far, as seen with the most recent cutoff date of September 28, 2022 results from the phase 1 study. All the patients in the 25 mg and 75 mg cohort have been HAE attack free with this latest follow-up period. The first 3 patients treated have been attack free for between 5.5 to 10.6 months after only having received a single dose of NTLA-2002. This in-vivo CRISPR/Cas9 treatment has been well tolerated at all dose levels. The next move for Intellia is to choose two doses of NTLA-2002 to test out in the phase 2 placebo-controlled, dose expansion portion of this trial. This portion of this study is expected to start in the 1st half of 2023. The key thing to point out with this interim data is that reduction of plasma kallikrein levels and subsequent reductions of HAE attacks were achieved by knocking out the KLKB1 gene with in-vivo CRIPSR/Cas9 gene editing. As the title suggests, the use of the company’s in-vivo CRISPR/Cas9 gene editing continues to deliver. Why is this the case? Well, the knockout/inactivation observed with the use of NTLA-2002 for HAE, has also been observed with NTLA-2001 for ATTR. However, in the case of NTLA-2001 for ATTR, it is a knockout edit of TTR. The knocking out of TTR was also proven with results released back in September of 2022. It was shown that 12 male patients who received a dose of NTLA-2001 achieved mean reductions in serum TTR levels with specific doses as follows:

• 93% reduction serum TTR with 0.7 mg/kg dose of NTLA-2001
• 92% reduction serum TTR with 1.0 mg/kg dose of NTLA-2001

As you can see, proof of concept has been established with NTLA-2001 for the treatment of patients with ATTR by using in-vivo knockout CRISPR/Cas9 gene editing. Thus, my conclusion that the latest results from the phase 1 study using NTLA-2002 for HAE reinforces the results observed with NTLA-2001 for ATTR.

Financials

According to the 10-Q SEC filing, Intellia Therapeutics had cash, cash equivalents and marketable securities of $848.7 million as of September 30, 2022. However, the company raised additional cash through an ATM which resulted in $62.1 million in net equity proceeds and then $15.1 million in proceeds due to an employee-based stock plan. However, it raised an additional $115 million after the end of Q3 2022 and through October 27, 2022. It needs a lot of cash to fund its pipeline and as such, only using the ATM was not enough. That’s why just a few weeks ago it offered to sell common stock to raise additional cash. It announced a pricing of an underwritten public offering of 6,550,219 shares of its common stock at a public offering price of $45.80 per share. It also granted the underwriters a 30-day option to purchase up to an additional 982,532 shares of its common stock at the very same price. In total, it raised gross proceeds of $300 million. Before this offering is believed that it would have enough cash to fund its operations for at least the next 12 months. However, in the most recent quarter it had spent $276.2 million to fund its operations. As such, I still believe that it will need to raise cash again at some point in 2023. It is also likely that it will continue to use its ATM to raise cash in between as it has been doing. That’s because under the new March 2022 Jefferies Open Market Sale Agreement, there is still $367.5 million in shares of common stock that remain eligible for sale.

Risks To Business

There are several risks that traders/investors should be aware of before buying this stock. The first risk to consider is with respect to both of the ongoing phase 1 studies using NTLA-2002 for HAE and NTLA-2001 for ATTR. That’s because even though they achieved their proof of mechanism of action with respect to biomarkers, they still need to be tested against placebo. That’s why the next set of studies, which are likely to begin in 2023, will have both of these in-vivo CRISPR/Cas9 gene editing drugs go against placebo for testing. There is no guarantee that one or both of these drugs will be successful against placebo. A second risk to consider would be with respect to the partnerships that have been established. NTLA-2001 for ATTR has been partnered out with Regeneron Pharmaceuticals, like many other programs. Then, you have OTQ923/HIX763 which has been partnered out with Novartis (NVS), along with other programs. The risk here is that if either of these big pharma companies don’t think that results live up to their expectations, then they can cut these programs at any time. They could also cut the partnership at any time for any other reason. As such, the stock could take a big hit if either of these companies were to pull out for whatever reason. The final risk deals with respect to the financials. That’s because as I stated above in the “Financials” section, it is highly likely that Intellia will continue to raise cash from its ATM agreement with Jefferies. Not only that, but I believe there is a great chance that it will have to enact another public offering in 2023 to raise more cash. The raising of cash by one or both of these methods will dilute shareholders and as such is a huge risk.

Conclusion

The final conclusion is that Intellia Therapeutics is a great speculative biotech play to look into. The reason why I state that is because it has already been able to establish proof of concept in using NTLA-2002 for HAE and then NTLA-2001 for ATTR. More specifically, it is on a strong track in being able to use its in-vivo CRISPR/Cas9 knockout editing (inactivation/deletion of a gene) technology to reduce protein production of a given disease. The beauty of this biotech is that the two proof of concept indications I showed above only deal with in-vivo gene editing. The biotech also has a pipeline full of candidates which will take advantage of the same CRISPR/Cas9 gene editing technology ex-vivo. In addition, another unique property of Intellia is the potential it may have in being able to advance an allogeneic “off the shelf” TCR or CAR-T cell therapies. Allogeneic in the sense of being able to derive donor T-cells from any donor, rather than autologous whereby donor cells have to be received from the intended treatment target themselves. The goal here is to open up the donors possible for these cancer patients, while at the same time using knockout gene editing to avoid rejection by host T and natural killer (NK) cells observed with other similar treatments. With proof of concept being established in using NTLA-2002 and NTLA-2001 for HAE and ATTR respectively, plus ability to expand to ex-vivo gene editing pipeline along with allogenic TCR-T/CAR-T therapies, these are the reasons why I believe that Intellia Therapeutics is a great speculative biotech play to look into.