Why the stock of Editas drugs is growing today

What happened

Actions of released Medicine (NASDAQ: EDIT) increased 41.5% higher from 11:57 a.m. EST on Monday. The company did not announce any big news this weekend or today, so why is the stock taking off?

First of all, not only Editas is performing well today. All biotech stocks with a focus on CRISPR gene editing have made solid gains. I suspect that this increase comes at least in part from comments made at the end of last week by Cathie Wood, CEO of Ark Investment Management. She said in an interview with Bloomberg: “I should say that the biggest surprises from above will come from the genomic space. That’s because the convergence of DNA editing, artificial intelligence and gene therapies, importantly the editing of the CRISPR gene, will cure the disease. ”

Today, Editas generates much higher profits than other state-of-the-art biotechnologies focused on CRISPR, CRISPR Therapeutics (NASDAQ: CRSP), however. This is probably due to several factors. First, Editas has reported some great news in recent weeks, including filing an application with the US Food and Drug Administration (FDA) to begin a 1/2 phase study of EDIT-301 in treating sickle cell disease. Second, Editas’ short interest is far greater than its rival’s short interest. We could see a short tightening on the move, while short sellers are struggling to close their positions, leading to an increase in Editas shares in the process.

DNA with a light shining in the background

Image source: Getty Images.

So what

The huge leaps that Editas offers today are exciting. However, investors should probably not become exuberant. Sometimes stocks can fall even faster than they rise.

But the prospects for Editas seem brighter than they have been for some time. The company could have a winner with EDIT-301 if its clinical results eventually looked as good as its preclinical data. The main candidate for the Editas pipeline, EDIT-101, could also prove to be a game changer in the treatment of congenital Leber type 10 (LCA10) amaurosis, the leading cause of child blindness.

Now what

The important things to look for with Editas in the future are the results of clinical trials. Editas has faced some enrollment challenges with its phase 1/2 study of EDIT-101 due to the COVID-19 pandemic. The launch of new coronavirus vaccines could help alleviate these problems in the first half of 2021.