Caribou Biosciences (CRBU): I See You

Extend but don't pretend

This will be a “best ideas only” bio substack providing actionable, highly digestible and high conviction value to investors focused on quality not quantity. Disclaimer: Nothing in this article (or substack) is considered investment advice and is solely the opinion of the author.

LONG
Ticker: CRBU
Duration: +24 months
Target: +$10 (likely higher)
Likely Outcome: Buyout
Value Driver: Extended cash runway, near term catalysts, NHL and MM program advancement

*Investors might want to take a longer-term view on this one as CRBU is earlier stage and has extended its cash runway due to a restructuring. The potential upside on this name is enormous if data is positive.*

I try not to focus too much on early stage biotech companies given how far in the future approvals tend to be, but as I continue to see total wreckage within the space, I couldn’t help but write a small piece on Caribou considering the potential upside. Caribou Biosciences, Inc. (CRBU) (a MaxCyte (MXCT) partner) is at a very interesting juncture as an early stage biotech company, primarily driven by its innovative gene-editing platform, strategic pipeline focus, and the potential for its allogeneic cell therapies to overcome key limitations of current treatments. The company, co-founded by Nobel laureate Jennifer Doudna, is at the forefront of developing next-generation CRISPR approaches, positioning it for significant long-term growth in the burgeoning field of genetic medicine.

The cornerstone of Caribou's promise lies in its proprietary chRDNA technology ("chardonnay" - might need a glass or two if you’ve been in this post-2021 carnage). This advanced CRISPR system utilizes hybrid RNA/DNA guides, a significant evolution from earlier all-RNA-based gene editing methods. This hybrid nature is crucial because it substantially reduces the risk of off-target editing, a common concern in first-generation gene-editing technologies, without compromising on-target efficiency. The chRDNA platform leverages the natural repair mechanisms of cells to precisely insert, delete, or modify DNA sequences. By combining features of both RNA and DNA in its guide molecules, chRDNA offers a unique balance of potency and precision. This meticulous control over gene editing is vital for therapeutic applications, where even minor unintended edits can have significant adverse effects. The design of these hybrid guides enhances the specificity of the CRISPR-Cas9 complex, directing it with high accuracy to the desired genomic location, thus minimizing edits at unintended sites across the genome.

The improved specificity offered by chRDNA is a critical differentiator, especially as the field progresses towards multiplexing, which involves making multiple gene edits simultaneously. A higher therapeutic index, meaning a wider margin between effective and toxic doses, is a direct benefit of this enhanced precision, offering a safer and potentially more effective therapeutic profile for patients. This becomes particularly important in complex diseases like cancer, where multiple genetic modifications may be required to create effective and persistent cell therapies. Caribou's chRDNA platform also navigates the complex intellectual property landscape surrounding gene editing 1.0. This strategic advantage, by circumventing ongoing legal disputes, could provide a smoother path for development and commercialization, reducing potential future legal hurdles and associated costs. The innovative design of chRDNA positions the company with a robust and defensible intellectual property portfolio, which is paramount in the highly competitive biotechnology sector. Further validating its technological prowess, Caribou has secured significant partnerships, including a notable equity investment from Pfizer which puts in play the same Eli Lilly playbook we recently saw with Verve (ie. takeout target mode).