Will Moderna buy Editas Medicine to get into gene editing?

Modern (NASDAQ: mRNA) has a problem. And that’s a very good problem to have. The company has a growing stock of cash and must find something to do with its money.

It’s an easy problem to solve, of course. Moderna plans to invest in its internal research and development programs. Its board of directors has approved a billion dollar share buyback program. The company is also considering possible acquisitions.

It’s there that issued Medicine (NASDAQ: MODIFY) might just fit into the picture. Will Moderna potentially buy Editas to get into gene editing?

Image source: Getty Images.

Moderna’s clear direction

Moderna certainly wants to add gene editing therapies to its pipeline. The company’s intentions were made crystal clear on its second quarter conference call.

CEO Stéphane Bancel said that Moderna’s second priority (after investing internally) “is to broaden our horizons by complementing our platform with external technologies or products. This means that we are interested in nucleic acid technologies, gene therapy, gene editing, mRNA. “

Moderna chairman Stephen Hoge said the company had “observed the [gene-editing] space in some interesting enough or significant enough way in terms of the ways in which we might help deliver gene-editing shipments across a range of different tissues. Hoge added: “And we think it’s a good time for us to start developing in that direction. “

The company ended the second quarter with more than $ 12 billion in cash. Moderna’s cash reserves will grow even more with its COVID-19 vaccine expected to bring in an additional $ 14 billion in the second half of this year. This gives the company great financial flexibility for shopping.

Why Editas could be a mature target

Admittedly, Moderna did not mention Editas Medicine or any other gene-editing company as a potential candidate for acquisition. However, there are several reasons why Editas could be a ripe target for a takeover.

If Moderna prefers to acquire clinical-stage biotechnology focused on gene editing, there aren’t many alternatives. Editas is one of only three companies to offer CRISPR gene editing therapies currently in clinical trials.

CRISPR Therapeutics is joined at the hip with Vertex Pharmaceutical, which has also partnered with Moderna. Intellia Therapeutics is in partnership with Regenerate on his top candidate. However, Editas does not have a partner for its main program. This could put the company higher on Moderna’s list.

Editas is also by far the cheapest of these three CRISPR-focused clinical-stage biotech companies. The company’s lower market cap could make it a more attractive target if Moderna isn’t willing to spend all of its money.

While its two rivals focus solely on CRISPR-Cas9 (Cas9 is a nuclease that localizes and binds to targeted genes), Editas has another nuclease in its arsenal, Cas12 (also known as Cpf1). Editas believes that Cas12 could increase its opportunities to develop gene editing therapies.

Hoge said Moderna wanted “to bring new payloads, new capabilities, new enzymes into our existing technological capabilities.” Editas’ dual-option CRISPR platform could fit perfectly into Moderna’s lens.

Don’t put the cart before the horse

While there are several solid reasons why Moderna might want to acquire Editas, it’s too early to speculate that a deal will actually materialize. Moderna might prefer to buy a preclinical company with promising gene-editing technology.

Moreover, Moderna will probably not be limited to acquisitions. The company could choose to partner with one or more gene-editing biotechnologies instead of purchasing one directly.

However, expect Moderna to move forward with its gene-editing expansion plans sooner rather than later. Now that the company has expressed its interest, it may push other major drugmakers to enter into their own business development deals with leaders in gene editing. Even if Moderna doesn’t come calling, Editas might find others who will.