Eli Lilly Just Proved Gene Editing Could Be Pharma’s Next Gold Rush — but CRISPR Therapeutics Investors Should Watch Out

The weight-loss drug market may be one of the fastest-growing therapeutic areas in the pharmaceutical industry. Eli Lilly(NYSE: LLY) has been a major winner from this boom. The drugmaker’s Zepbound is one of the best-selling anti-obesity medicines. Eli Lilly also recently received approval for Foundayo, an oral weight-loss pill that is already seeing decent success. In addition to those approved products, the drugmaker has a pipeline with several other candidates in this area.

Eli Lilly could ride the weight loss tailwind for a while, but the company is already looking for the next big thing in the industry. Could Eli Lilly’s work in gene editing be it? Let’s look at recent clinical trial results for one of Eli Lilly’s gene-editing candidates and what they mean for leading companies in this niche, such as CRISPR Therapeutics(NASDAQ: CRSP).

The power of gene editing

Gene editing refers to a set of techniques that allow scientists to alter the genetic makeup of organisms. This is a powerful tool at our disposal, as it can help address the root causes of many diseases rather than merely treating their symptoms. The gene editing landscape has made significant progress over the past decade. For instance, in 2023, CRISPR Therapeutics earned approval for the first CRISPR-based therapy. That was a big deal since this technique earned its creators a Nobel Prize in chemistry.

In all likelihood, more transformative treatments will be developed through gene editing over the next decade or so. Eli Lilly wants a piece of it. The pharmaceutical giant recently announced clinical trial results for VERVE-102, an investigational gene editing medicine being developed for heterozygous familial hypercholesterolemia (HeFH) or premature coronary artery disease (CAD). Both diseases have a strong genetic component (in fact, the first is a genetic disorder) and lead to elevated levels of LDL cholesterol, which can cause things like heart attacks and strokes.

There are ways to manage high LDL levels, notably through diet or exercise, and some prescription medicines can also help. However, for patients at high risk of serious cardiovascular problems, a one-time treatment that can help lower LDL levels permanently might be a game changer. That’s exactly what VERVE-102 could be. The results of a phase 1b study Eli Lilly recently announced showed that a one-time infusion of VERVE-102 substantially lowered LDL cholesterol, with the effect appearing durable.

A David vs Goliath situation?

CRISPR Therapeutics is developing CTX310, a medicine that aims to decrease LDL and triglycerides (TGs, which can also cause cardiovascular issues) in certain patients. CTX310 is also a one-time gene editing medicine. Should CRISPR Therapeutics investors be worried? On the one hand, it’s worth noting that although VERVE-102 and CTX310 both aim to reduce cardiovascular risk, they target different patient populations (CTX310 is going after patients with HeFH or several other conditions) and have distinct mechanisms of action.

Also, as CRISPR Therapeutics points out, there are 40 million patients with elevated LDL or TGs (or both) in the U.S. alone, so this is a vast market that could accommodate multiple winners. However, Eli Lilly may be just getting started making some noise in the gene editing space. And if it continues to do so — and is successful — the pharmaceutical leader might end up being a significant threat to smaller gene editing players like CRISPR Therapeutics. Investors need to keep that in mind.

Which stock should you buy?

Provided gene editing represents the next gold rush in the industry, Eli Lilly and CRISPR Therapeutics offer very different value propositions. The former is a well-established drugmaker with significant footprints across several therapeutic areas and a lead in the diabetes and weight-loss markets. Eli Lilly generates consistent revenue and profits, has a deep pipeline, and a respectable dividend program. Its work on gene editing is a relatively small aspect of the business, so for investors looking for exposure to this niche, Eli Lilly is a fairly safe option.

CRISPR Therapeutics, on the other hand, focuses almost entirely on gene editing. The stock could soar as it makes significant clinical progress over the next few years, but setbacks might also sink CRISPR Therapeutics’ share price. In other words, CRISPR Therapeutics is the more aggressive option; it arguably offers higher upside, but the trade-off is an elevated risk profile. Only investors comfortable with volatility should consider initiating a position in CRISPR Therapeutics.

Prosper Junior Bakiny has positions in Eli Lilly. The Motley Fool has positions in and recommends CRISPR Therapeutics and Eli Lilly. The Motley Fool has a disclosure policy.