How a single scientific preprint triggered a financial earthquake in the biotech world, wiping hundreds of millions from pioneering gene-editing companies' valuations.
A single scientific preprint once triggered a financial earthquake, wiping hundreds of millions of dollars from the value of pioneering gene-editing companies in mere hours. This event highlights the volatile and high-stakes world of biotech investing, where groundbreaking science and market forces collide with dramatic consequences.
Wiped from valuations in hours
Year of the market-shaking preprint
Major companies affected
To understand the shockwave caused by the preprint, one must first appreciate the context of the CRISPR craze. Following its discovery as a bacterial defense mechanism, the CRISPR-Cas9 gene-editing system was hailed as a revolution for biology and medicine. It promised a future where genetic diseases could be cured by simply snipping and repairing faulty DNA, much like a programmer edits computer code.
This scientific promise ignited a financial frenzy. Billions of dollars flowed into the sector, and companies like CRISPR Therapeutics, Editas Medicine, and Intellia Therapeutics became darlings of investors. The excitement was palpable; no less an authority than the Nobel Prize committee recognized the technology's world-changing potential in 20202 . The dream of curing inherited diseases seemed within reach, and the market valued these companies not on their current profits, but on their future potential1 2 .
CRISPR-Cas9 identified as gene-editing tool
First major funding rounds for CRISPR companies
Market-shaking preprint published
Nobel Prize awarded for CRISPR discovery
First FDA approval for CRISPR therapy (CASGEVY)
In early 2018, the first major crack appeared in this facade. A scientific paper was posted to the preprint server bioRxiv, a platform where researchers share findings before formal peer review. This study raised a crucial and alarming question: did the human immune system pose a fatal barrier to CRISPR therapies?
The study suggested that a significant portion of the human population might have pre-existing immunity to the Cas9 protein—the molecular "scissors" used to cut DNA. This immunity, developed from exposure to the bacteria that naturally produce Cas9, could potentially cause patients' immune systems to attack and destroy the CRISPR-based therapy, rendering it ineffective or even causing a dangerous immune reaction.
A significant portion of the population may have immunity to Cas9 protein
The financial markets reacted with immediate and severe panic. The concerns raised in the preprint were not just a minor scientific hurdle; they threatened to invalidate the entire business model of the companies leading the charge.
| Company | Approximate Stock Drop | Key Factor |
|---|---|---|
| CRISPR Therapeutics | ~15% in a short period | Focus on ex vivo & in vivo therapies |
| Editas Medicine | ~10% in a short period | Lead programs reliant on Cas9 delivery |
| Intellia Therapeutics | ~10% in a short period | Developing in vivo CRISPR treatments |
"While the exact figures from the day are historical, the precedent was set: scientific news, even in preliminary form, could directly and powerfully impact the valuation of these companies. This volatility remains a feature of the sector years later."
For instance, in 2025, CRISPR Therapeutics' stock has seen dramatic swings, dropping nearly 7% in a single session after a revenue miss, only to rally 41% over three months on positive clinical data and growing sales of its approved therapy, Casgevy4 6 .
The 2018 preprint was a watershed moment, revealing that the path from scientific breakthrough to commercial success would be far more difficult than many had hoped. Even years later, with approved therapies on the market, the industry continues to grapple with a complex reality.
In 2025, a stark headline declared, "The CRISPR companies are not OK"2 . Despite the FDA approval of CASGEVY, a landmark cure for sickle cell disease and transfusion-dependent beta-thalassemia, the financial success has not matched the scientific achievement. Weeks before the approval, CRISPR Therapeutics laid off employees, leaving many "dumbfounded"2 . The challenges are multifaceted:
The field has also become fiercely competitive. CRISPR Therapeutics no longer has the stage to itself.
| Company | Lead Candidate | Development Stage | Target Disease |
|---|---|---|---|
| Beam Therapeutics | BEAM-101 | Phase I/II | Sickle Cell Disease (SCD) |
| Intellia Therapeutics | NTLA-2002 (Lonvo-z) | Late-stage (Planned H2 2026 FDA filing) | Hereditary Angioedema (HAE) |
| Intellia Therapeutics | NTLA-2001 (nex-z) | Late-stage | ATTR Amyloidosis |
Beyond these, Casgevy also faces competition from chronic (non-curative) therapies like Bristol Myers' Reblozyl and Novartis' Adakveo6 . This crowded field means that any scientific setback or advancement by a competitor can immediately impact a company's perceived value, much like the 2018 preprint did.
The groundbreaking work in gene editing relies on a suite of specialized tools and reagents. The following table outlines some of the essential components used by scientists in CRISPR-Cas9 experiments.
| Research Reagent | Function in the Experiment |
|---|---|
| CRISPR-Cas9 System (e.g., plasmid, mRNA) | Delivers the genetic blueprint for the Cas9 protein and the guide RNA into the target cell. |
| Guide RNA (gRNA) | A short RNA sequence that acts as a "GPS," guiding the Cas9 protein to the exact location in the genome that needs to be cut. |
| Delivery Vectors (e.g., AAV, Lentivirus) | "Vehicles" used to efficiently transport the CRISPR-Cas9 components into specific types of cells, both in the lab (in vitro) and in living organisms (in vivo). |
| Cell Culture Media & Reagents | Provides the necessary nutrients and environment to keep cells alive and healthy outside an organism for in-vitro editing. |
| Selection Antibiotics (e.g., Puromycin) | Allows scientists to selectively grow only the cells that have successfully taken up the CRISPR-Cas9 machinery. |
| Analytical Tools (e.g., T7E1 Assay, NGS) | Used to confirm and quantify the efficiency and accuracy of the gene edit after the experiment is complete. |
The CRISPR-Cas9 system works like genetic scissors, with the Cas9 protein cutting DNA at precise locations guided by RNA molecules.
The 2018 preprint was a painful but necessary lesson in the realities of biotech innovation. It demonstrated that the market's hype must eventually be tempered by scientific and commercial validation. The CRISPR revolution was never going to be a simple, straight line from discovery to cure.
Today, the industry is in a maturation phase. Companies are navigating the complex transition from presenting promising data in scientific journals to proving their therapies can be safe, effective, manufacturable, and commercially viable. They are expanding their pipelines beyond early targets, exploring applications in cancer, cardiovascular disease, and beyond, using both in vivo and ex vivo approaches6 .
The dream of gene editing is far from dead; if anything, it is more alive than ever with approved medicines now helping patients. However, the path forward requires not just scientific brilliance, but also financial resilience, logistical expertise, and strategic patience. The story of CRISPR is a powerful reminder that in the world of biotech, the most profound breakthroughs are often accompanied by the most daunting challenges.
Scientific breakthroughs must be paired with commercial viability for long-term success in the biotech sector.
1
FDA-approved CRISPR treatment (CASGEVY)