Shares of startup gene editing biotech Editas Medicine (edit), which had the first U.S. IPO of 2016, plunged nearly 26% in Tuesday trading after enjoying more than a month as the runaway most successful firm to go public this year.
While the reason for the drop wasn’t immediately clear, some industry observers pointed to impending court proceedings on the CRISPR/Cas-9 genome editing tech at the center of Editas’ efforts as a potential culprit.
Editas and Chinese firm BeiGene (bgne) broke 2016’s U.S. IPO drought by going public in early February. Since then, the former firm has been the clear winner in the volatile biotech stock market, with shares ballooning by a staggering 130% through March 8 while the broader NASDAQ biotech index (NBI) fell 1.4% over the same period. The stock is still up about 70% since the IPO despite Tuesday’s drop. The NBI is down about 1.2% on the day.
As The Street notes, one major reason for Editas’ success over its 2016 IPO peers is a heavy-hitting roster of investors which includes Bill Gates, Google Ventures (googl), and Fidelity Investments, among others.
Investor chatter on Twitter concerning the Tuesday drop have pointed to two main theories. One points to a natural correction considering Editas’ monster gains and $1.3 billion-plus market share despite being years away from human clinical trials.
The more likely possibility is the important impending court proceedings over a CRISPR patent dispute between the University of California and the Broad Institute/Massachusetts Institute of Technology which could shake things up in the market.
Fortune has reached out to Editas and analysts from Morgan Stanley about today’s stock drop and will update this post if they respond.