Shares of Editas Medicine (NASDAQ: EDIT) were jumping 11.9% higher as of 3:33 p.m. EST on Monday in much heavier-than-normal volume. The gene-editing biotech didn't announce any news, either today or over the weekend. So what's behind Editas' big jump? There are several potential factors.
A rising tide lifts all boats, and the tide is definitely on the rise today for small-cap stocks. The Russell 2000 Index, which includes Editas Medicine among other small-cap stocks, moved more than 2% higher on Monday. In addition, an article was published on Nature.com today that didn't mention Editas by name but was favorable toward the use of CRISPR gene editing in treating eye diseases. Editas' lead candidate, EDIT-101, targets genetic eye disease Leber congenital amaurosis type 10 (LCA10).
It's also possible that investors anticipate positive news from Editas in the near future. The company is scheduled to participate in a fireside chat at the Piper Jaffray Healthcare Conference next week. It is also set to present pre-clinical data from its EDIT-301 program targeting the rare genetic blood disorders sickle cell disease and beta thalassemia at the American Society of Hematology (ASH) annual meeting in early December. The company also expects to move forward with its first clinical trial of EDIT-101 in early 2020.
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It's not all that unusual for small biotech stocks to experience big price swings on no hard news. Investors shouldn't dwell on the short-term volatility (whether positive or negative) and instead focus on the company's long-term prospects.
Those prospects appear to be promising for Editas. The biotech and big partner Allergan (NYSE: AGN) aren't far away from launching the first clinical study evaluating EDIT-101 in treating Leber congenital amaurosis. The first potential patient for this study has already been screened.
Editas also expects that it will be ready by the end of this year to begin pre-clinical studies in support of obtaining FDA approval for clinical testing of its Usher syndrome type 2A program. Like LCA10, Usher syndrome 2A is a genetic eye disease.
Wait for some real news -- that's the best thing for investors to do now with Editas. Some news could come as soon as next week at the Piper Jaffray conference or at ASH. Even if not, though, 2020 should be an enormously important year for Editas as its clinical study kicks off for EDIT-101.
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