Editas Medicine, Inc. EDIT incurred a loss of 43 cents per share in the second quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of 80 cents and also the year-ago loss of 69 cents.

Collaboration, and other research and development revenues comprising the company’s top line came in at $10.7 million, substantially up from the year-ago quarter’s $2.3 million. The top line also comprehensively beat the Zacks Consensus Estimate of $6 million.

Editas has no approved product in its portfolio at the moment. The company generates collaboration revenues, and other research and development revenues.

In the reported quarter, research and development expenses were $28 million, up 18.6% from the year-ago figure due to increased fees of licensing and sublicensing activities, and costs borne for expanding the development organization and facilities. General and administrative expenses dipped 2.1% to $14.1 million owing to lower professional service expenses and patent related fees.

Shares of Editas have rallied 17.3% in the year so far compared with the industry’s increase of 5.4%.

Pipeline & Other Updates

In the absence of an approved product in Editas’ portfolio, pipeline development remains in focus for the company.

Notably, in a separate press release, Editas announced that it has terminated its 2017 agreement with Allergan [now part of AbbVie ABBV] and regained full global rights to develop, manufacture and commercialize its ocular medicines including EDIT-101.

Both companies entered into a new agreement wherein AbbVie will return the development and commercialization rights of ocular medicines to Editas.

Editas’ lead pipeline candidate EDIT-101, which uses CRISPR gene editing technology, is being developed for treating Leber congenital amaurosis type 10 (LCA10), a rare genetic illness that causes blindness. This disease has a significant unmet need as no therapies are presently approved to cure the same.

In March 2020, Editas and Allergan dosed the first patient in a phase I/II study of BRILLIANCE evaluating EDIT-101 for treating LCA10. The company plans to complete dosing of the adult low-dose cohort (two patients) and dose at least one patient in the adult mid-dose cohort by the end of 2020.

Meanwhile, Editas is ready with the investigational new drug (IND)-enabling studies on EDIT-102, currently being developed for treating Usher Syndrome 2A. On the second-quarter conference call, management stated that with the termination of the company’s agreement with Allergan, Editas will transition manufacturing processes and materials from the latter to advance the IND-enabling studies.

Editas already initiated IND-enabling activities for EDIT-301, an experimental CRISPR medicine, designed to treat sickle cell disease and beta-thalassemia by editing the beta-globin locus. The company plans to file the IND for EDIT-301 by the end of this year.

Notably, in April 2020, Editas initiated the IND-enabling activities for its allogeneic natural killer (NK) cell medicine EDIT-201 for the treatment of solid tumor cancers. An IND for EDIT-201 is expected to be filed in the second half of 2021.

We remind investors that last month, Editas entered into manufacturing and strategic agreements Catalent CTLT and Azzur Group to support the preclinical and clinical development of Editas’ in vivo CRISPR and engineered cell medicines including EDIT-101, EDIT-201 and EDIT-301.

Zacks Rank & Key Pick

Editas currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the healthcare sector is Emergent BioSolutions Inc. EBS, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent’s earnings estimates have moved 71.2% and 99.1% north for 2020 and 2021, respectively, over the past 60 days. The stock has skyrocketed 135.3% year to date.

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