Victoria Gray, a 34-year-old mother of four in Forest, Miss., had been going to the hospital seven times a year for transfusions to help with the severe pain brought on by her sickle cell disease. In July 2019, she volunteered for a radical new technology known as gene editing. She has been free of the pain and suffering since.

I chose to participate in this trial because of hopehope that it would change my life, Gray tells Barrons. And it has already in so many ways.

Her successful treatment gives hope to the 100,000 other Americans who suffer from sickle cell. It also illuminates the enormous potential for the companies that are pioneering genetic medicine to cure diseases with a one-time treatment.

Sickle cell is among their first targets. The companies include the sponsors of Victoria Grays clinical trial Crispr Therapeutics (ticker: CRSP) and Vertex Pharmaceuticals (VRTX)as well as biotechs like bluebird bio (BLUE), whose gene therapy for sickle cell is further along in testing and could be introduced by 2022.

For these companies, genetic therapies for sickle cell could fetch annual revenue of several billion dollars apiece. A recent Bank of America Securities report predicts that new treatments for sickle cell will surpass $6 billion in sales by 2028. That is meaningful for a company of any size, but particularly so for these biotechs. Crispr doesnt yet have sales. Bluebirds revenue last year was $45 million, and Vertexs, $4 billion.

More important, the sickle cell therapies will demonstrate how such genetic technology could open the door to curing dozens of other diseases.

Investors seem persuaded. They have lifted Crispr stock threefold since March to a recent high of $97, which values the development-stage company above $6 billion. Hitting a record high of $306, Vertexs value has topped $75 billion, while bluebirdwhose investors have waited nearly a decade for their paydaytrades at a more modest market cap of $4.2 billion. Biotech valuations may be hard to rationalize these days, but that reflects the radical changes that new technologies are bringing to the health-care business. One need look only at this years fourfold rise of the messenger RNA vaccine leader Moderna (MRNA).

The focus on sickle cell is a turnaround for the pharmaceutical industry, which had long ignored the inherited disorder. Sickle cell mainly afflicts Black Americans and residents of poor African nations. It is the most commonly diagnosed genetic disorder among newborn Americans. Yet it has not had as much funding as some less-common inherited conditions. Cystic fibrosis, for example, affects one-third as many Americans, but researchers at Duke University have shown that it has historically received more than seven times the federal and foundation research funding per patient.

This year, two new sickle cell drugs came on the market. And sometime next year, bluebird will ask the U.S. Food and Drug Administration to approve its sickle cell gene therapy. Crispr and Vertex hope that they will not be not far behind.

The starting prices of the new sickle cell treatments are expected to range from $100,000 to over $1 million. It will be a challenge to make them accessible to the millions of people in poor countries who have sickle cell.

The disease is caused by a single variation in a gene for hemoglobin, the protein that carries oxygen in our red blood cells. The genetic trait is prevalent among those whose descent traces to sub-Saharan Africa, because a single copy of the sickle cell gene protects you from developing malaria. Inherit a copy from each parent, however, and you become one of 300,000 babies born in the world each year with sickle cell disease. It causes hemoglobin molecules to form long chains that warp red blood cells into sickle shapes that get stuck in blood vessels and block the flow to vital organs.

The result is terrible pain, organ damage, infections, andwhen left untreateddeath before age 5, on average. In the U.S., where the disease occurs in one of every 365 Black babies, available treatments still leave many with a life of pain, disability, and death before age 50.

The first sickle cell treatment approved by the U.S. Food and Drug Administration was hydroxyurea, in 1998. For the half of sickle cell patients with moderate disease, treatment with hydroxyurea, antibiotics, and transfusions can allow productive lives. Hydroxyurea is off-patent and costs less than a dollar a day. But even that price is beyond reach of those who live in resource-poor countries, says Russell Ware, a pediatric hematology professor at the University of Cincinnati College of Medicine. Ware is working with medical colleagues in Uganda to get more children there on hydroxyurea.

Data as of 7/22/20

Bloomberg; company filings

The beauty is that its off-patent, says Ware, but its also a curse, because no one can make money off it.

Novartis (NVS) is supporting hydroxyurea availability in collaboration with the government of Ghana. The Swiss drug giant is also planning clinical trials in Ghana and Kenya for Adakveo, a monoclonal antibody approved by the FDA last November as one of the first novel treatments in decades for sickle cell disease. Adakveo dampens the inflammatory process that makes sickle cells clog blood vessels in cases that send some 50,000 Americans to the emergency room every year.

The intravenous drugs initial sales in the years first half were $36 million, but analysts hope that by the middle of this decade, Adakveos annual sales could reach $1 billion to $2 billion in the U.S. and Europe.

Just days after approving the Novartis drug, the FDA approved another sickle cell drug called Oxbryta, from Global Blood Therapeutics (GBT). Oxbryta is a pill that prevents defective hemoglobin from forming chains within red blood cells. The product is GBTs first, and it produced $14 million in sales for the March quarter, with a loss of $73 million.

But analysts like Yatin Suneja of Guggenheim Securities say that Oxbryta can hit sales of $1.7 billion in a few years, yielding some $13 a share in earnings for GBT. That makes Suneja think that GBT stock can rise from its current level of $72 to $115.

Successful sickle cell treatments could lift a number of biotech companies.

GBT CEO Ted Love says that Oxbrytas benign safety profile gives the company confidence that it will win approval to market the product for children, and in higher doses for adults. If other sickle cell treatments in the companys pipeline pan out, he imagines that sickle cell might one day become as well managed a disease as HIV.

Love is aware of the potentially curative gene therapies being tested by others, but he thinks that patients with milder cases of sickle cell might say, Just give me a pill.

For several decades, it has been possible to cure sickle cell with a bone-marrow transplant from a related donor. But the scarcity of matched donors and the risk of serious immune reactions have limited the number of such procedures to about 1,000. Recent breakthroughs in genetic technology promise to overcome those limitations by extracting a patients own cells, manipulating the cells genetic code, and then replacing the patients marrow with the amended cells.

The Cambridge, Mass.based bluebird bio is already in Phase 3 clinical trials of its beti-cel gene therapy for another inherited disorder of red blood cells called beta-thalassemia. Less common than sickle cell, thalassemia leaves patients with so few red blood cells that they can need more than a dozen transfusions a year. At a recent online gathering of hematologists, bluebird said that 60 children and adults with thalassemia had gone through its beti-cel procedure. About 90% had gone a year without needing a single transfusion.

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With a similar treatment for sickle cell, which bluebird calls LentiGlobin, more than two dozen patients have been infused with their own modified cells. Among the 14 patients who were six months past their treatment, there has been a 99.5% decrease in the blood vessel jam-ups that the patients previously suffered.

That is fundamentally transformative, says bluebird CEO Nick Leschly, and far exceeds any and all expectations weve ever had, any of our investigators have ever had, or the patients that have been treated.

These potentially curative cell therapies are complex procedures that are expected to be priced at about $1 million a patient. The thalassemia treatment is already approved in Europe. After the patients in bluebirds U.S. trials for thalassemia and sickle cell have been followed up for 18 months, the company will seek FDA approvalhopefully next year.

RBC Capital Markets believes that the companys sickle cell treatment could reach sales of $2 billion a year and help lift bluebird stock from its recent price of $66 to $100.

It took bluebird a decade to get to this point, and its shares have sunk as low as $17 and soared as high as $236, as investors reacted to the companys dramatic successes against refractory cancers. With Buy recommendations all along Wall Street, bluebird will get the capital it needs to cross the finish line.

Hard on the heels of bluebird are companies that believe they have better genetic treatments. One of them is Crispr Therapeutics. The company takes its name from CRISPR, shorthand for a Nobel Prizewinning technology that homes in on a targeted stretch of DNA and snips the double-stranded molecular code with a kind of chemical scissors.

The way I describe it to my patients, says patient Grays doctor Haydar Frangoul, at the Sarah Cannon Research Institute in Nashville, is that you have a book with 500 pages of thousands of words, and we are finding one word and correcting it.

Crispr Therapeutics CEO Sam Kulkarni says that CRISPR technology should provide more durable and uniform results than earlier generation treatments like bluebirds. When Crispr reported Grays healthy progress last month, it said that a second patient with sickle cell has also been treated, as well as five patients with thalassemia. Kulkarni hopes to reach the market with his treatments not too far behind bluebird.

This years surge in Crispr Therapeutics stock allowed it to raise about $450 million in a June stock offering. Jefferies analyst Maury Raycroft has estimated that a successful sickle cell treatment could contribute a third of the $5 billion in annual revenue he projects for Crispr by 2030, with earnings above $30 a share. The stock has blasted through his last price target of $82.

Behind Crispr are still other gene-editing companies working on treatments for thalassemia and sickle cell, including Sangamo Therapeutics (SGMO), Editas Medicine (EDIT), and Intellia Therapeutics (NTLA).

One of this years most successful initial public offerings was the February debut of Beam Therapeutics (BEAM), which is in preclinical testing of sickle and thalassemia treatments that would use a next-generation editing technology that CEO John Evans believes will be even more effective than CRISPR.

If these other companies sickle cell treatments pan out, they may be scrapping for market share after bluebird and Crispr have established products. Still, as the pharmaceutical giants shop for gene-editing know-how, there may be buyouts.

Sickle cell has been a long-neglected illness, but many companies are now competing with treatments that each hopes will be best-in-class. This should be a dogfight, says bluebird CEO Leschly, because thats in the interest of patients.

Write to Bill Alpert at william.alpert@barrons.com

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These Companies Are Seeking a Cure for Sickle Cell. And Its Just the Beginning for Some Gene Therapy Stocks. - Barron's

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