Verve Therapeutics: Why Great Results Aren’t Enough

It may appear that Verve Therapeutics (VERV 6.68%) is facing unfair odds to an outside observer. The biotechnology stock, in the clinical-stage, is developing one-and-done therapies using a unique approach to CRISPR-based gene editing.

The most advanced treatment candidate of Verve Therapeutics, VERVE-101, showed positive results in its initial clinical trial. However, despite seemingly great news, inexperienced biotechnology investors were taken aback when the stock plummeted by over 40% in response.

If the dramatic stock price activity of Verve Therapeutics left you feeling disoriented, you’re not alone. Let’s delve deeper into what transpired to avoid being caught off guard in the future.

Great data but a lousy market response

The new gene therapy candidates of Verve Therapeutics alter a patient’s DNA with base-editing techniques, resembling the use of a pencil and eraser. This should result in fewer unintended effects compared to the techniques utilized by CRISPR Therapeutics, which function more like a pair of scissors.

On Nov. 12, Verve announced interim phase 1 trial data for VERVE-101, an experimental base-editing therapy that limits the production of PCSK9, a protein that controls liver cell receptors removing cholesterol from the blood.

Turning off the production of PCSK9 with VERVE-101 should lead to lower cholesterol for patients predisposed to high cholesterol. Investigators recorded LDL cholesterol reductions between 47% and 84% among the three patients receiving the strongest doses tested, just one month after a single treatment.

Despite the strong positive efficacy results, shares of Verve Therapeutics plummeted by more than 40% when the market opened on Nov. 13.

Why Verve Therapeutics stock tanked

There were no safety issues that clearly indicated problems ahead for VERVE-101, but the initial phase of the study was not without flaw. One patient receiving a low, sub-therapeutic dose died of heart failure five weeks after receiving the drug. Another patient experienced a non-fatal heart attack the day after treatment.

Both incidents were determined to be unrelated to treatment with VERVE-101 by the trial’s independent safety monitoring board. Unfortunately, one-and-done treatments meant to last forever are held to stricter safety standards than traditional drugs because they cannot simply be discontinued.

Unfortunately for Verve Therapeutics investors, Novartis has an approved PCSK9 drug, Leqvio, which is injected just twice a year. In August, Novartis demonstrated that Leqvio safely maintained LDL cholesterol levels down by about 50% for hundreds of patients monitored for more than three years. With a very manageable dosage schedule and similar efficacy results to VERVE-101, competing with Leqvio could be a challenge.

What’s next

Investors anticipating significant drug sales from Verve Therapeutics shouldn’t hold their breath. It has been seven years since CRISPR Therapeutics went public with promises to develop new gene editing therapies. The gene-editing pioneer is getting close with exa-cel, but the U.S. Food and Drug Administration (FDA) still hasn’t approved any CRISPR-based gene therapies from this or a plethora of less advanced companies with similar technology.

On or before Dec. 8, the FDA is expected to issue an approval decision regarding exa-cel. Verve Therapeutics investors should keep a close watch on this as approval to treat severe sickle cell disease is widely expected. However, the agency could decide it doesn’t know enough about exa-cel’s long-term effects yet and make VERVE-101’s timeline even less certain than it already is.

Buy, sell, or hold?

It’s unclear when Verve Therapeutics will have a drug to sell, but it has a big pharma partner that can fund late-stage development of its pipeline.

Verve Therapeutics licensed some of the base-editing technology VERVE-101 is based on from Beam Therapeutics. In October, Verve’s collaboration partner, Eli Lilly, paid Beam $250 million upfront for rights to co-develop and co-commercialize VERVE-101 plus multiple earlier-stage programs aimed at cardiovascular targets.

Beam’s windfall won’t go to Verve Therapeutics directly, but it suggests Eli Lilly is ready to step in with significant capital if VERVE-101 or an earlier-stage candidate shows promise. Now might not be the best time to buy the stock, but holding on if you already own shares seems like the right move.