What happened
Beam Therapeutics (BEAM -6.69%), a pre-clinical gene-editing company, saw its shares dip by as much as 9.8% in early morning trading Monday. The biotech's stock has recovered to a degree as today's session has unfolded, but its shares were still down by 3.64% as of 12:49 p.m. ET Monday afternnon.
What's weighing on the biotech's stock price today? Ahead of the opening bell, Beam announced that the Food and Drug Administration (FDA) placed a clinical hold on its relapsed/refractory T-cell acute lymphoblastic leukemia candidate known as BEAM-201. BEAM-201 is the company's lead off-the-shelf chimeric antigen receptor T-cell therapy candidate.
So what
Beam didn't provide a reason for the clinical hold in its early morning press release. The biotech did say, however, that the FDA would send an official clinical hold letter would be sent to the company within the next 30 days. Presumably the agency's concerns will be made public once Beam digests the contents of this upcoming letter.
That being said, the most likely reason for the hold is the FDA's increasingly cautionary approach toward off-the-shelf CAR T-cell therapies in general. Previously, the FDA placed holds on broadly similar anti-cancer therapies from Allogene Therapeutics and Cellectis.
Now what
Is Beam stock a buy on this latest weakness? I believe so. BEAM-201, after all, isn't a central pillar of the company's core value proposition. The future of the biotech's novel base-editing platform truly depends on its performance in an upcoming trial for sickle cell disease. In other words, Beam's shares arguably don't deserve to be punished for this fairly minor clinical hiccup.
