Crispr Therapeutics AG’s stock rallied 12% Wednesday, after a positive meeting of a Food and Drug Administration advisory panel on a treatment for sickle-cell disease raised hopes it will win regulatory approval.

The gene-editing drug, called exa-cel, is being developed by Crispr
CRSP,
+5.55%

and partner Vertex Pharmaceuticals
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+1.95%
.
The FDA has set a Dec. 8 target action date for possible approval of the treatment, which would make it the first approved therapy using the gene-editing technology called Crispr.

Sickle-cell disease is a painful inherited blood disorder that affects an estimated 70,000 to 100,000 Americans a year, according to the American Society of Hematology.

Analysts weighing in on the meeting — which, unusually, did not include a vote — were bullish on the outlook for the drug. The FDA often uses a panel of outside experts to review and make recommendations on new drugs; it is not obliged to follow their advice, but often does.

In this case, the panel reviewed the drug’s potential off-target effects. A drug used to treat one particular condition or symptom can have effects on other pathways or tissues within the body in addition to the intended target, according to the National Institutes of Health. These are known as off-target effects, and are tracked because they can lead to side effects ranging in severity from mild to life-threatening.

“Rational thinking prevailed at today’s FDA [advisory-committee meeting],” analysts at Evercore ISI wrote in a note. “We think exa-cel is very likely to be approved by December 8.”

In the absence of a vote, Evercore compiled some of the more positive comments from the meeting:

  • “Don’t let the analysis stand in way of the good.”

  • “Expecting perfection at the risk of progress.”

  • “Not sure what else we can do?”

  • “What’s reasonable? We can’t sequence every patient.”

The analysts described it as a “clearing event” for Vertex and a “nice win for Crispr, their platform, and important medical advancement for the field and for patients.”

Truist analysts said the event felt like a check-the-box and said they expect approval by, or even before, Dec. 8.

“We think tangible and clear clinical benefits of exa-cel coupled with extensive off-target analyses already carried out by sponsors Vertex and CRISPR outweigh theoretical risks of exa-cel,” wrote analysts led by Joon Lee.

Commitments for extensive post-approval follow-up for over a decade are “reassuring,” they wrote, while “heartfelt testimonies from SCD patients and advocates during the open public hearing remind us that hard data should be balanced with unmet need and careful risk/benefit analysis in evaluating drugs for approval.”

Truist has a buy rating on Crispr’s and Vertex’s stocks.

Needham, meanwhile, said it viewed the meeting as a de-risking event ahead of the December meeting.

“The sentiment repeated consistently by committee members throughout the day was that the significant reductions in serious VOCs/hospitalizations in exa-cel treated patients seemed to outweigh any concerns that more testing could theoretically be done to look for off-target edits, which are typically biologically irrelevant (<1%),” said analyst Gil Blum.

“As a result, we are optimistic that exa-cel’s clinical data package will be enough to grant an accelerated approval,” he wrote.

Needham also rates the stock a buy.

Sickle-cell disease, also called sickle-cell anemia, disproportionately impacts Black and Latino people in the U.S., according to the Centers for Disease Control and Prevention. It occurs among 1 out of every 365 Black or African-American births, and about 1 out of every 16,300 Hispanic-American births.

That’s because it occurs more frequently among people whose ancestors came from parts of the world where malaria is or was common, the CDC says. People who have the sickle-cell trait are believed to be less likely to have severe forms of malaria.

Crispr’s stock has fallen 4% to date in 2023, while Vertex’s stock has gained 25% and the S&P 500
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has gained 9%.

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