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This CRISPR stock forecast will examine the investment potential for one of the most innovative companies in the biotech industry.
CRISPR Stock Forecast: Background
CRISPR Therapeutics is a gene-editing company focused on translating revolutionary CRISPR/Cas9 technology into transformative therapies.
Before we get into the company, let’s define some terms:
- CRISPR: Clustered Regularly Interspaced Short Palindromic Repeats — the tool that edits DNA
- Cas9: the enzyme that cuts the DNA
Now here’s a translation that might actually make sense — CRISPR Therapeutics can disrupt, delete, correct, or insert DNA.
If DNA is software, then CRISPR is computer programming. Here’s a video from CRISPR’s website for visual learners.
CRISPR Stock Forecast: Investment Potential
#1. CRISPR and the Biotech Decade
Emmanuelle Charpentier co-invented CRISPR/Cas9 technology in 2012 and founded CRISPR Therapeutics shortly thereafter to continue research and eventually commercialize the tech.
These are the breakthroughs that laid the foundation for the upcoming ‘Biotech Decade,’ a period of time where rapid advancements in AI and computing power allow biotechnology to fundamentally change our species and the planet.
A perfect storm of biotech is currently unfolding:
- Covid-19 pulling forward biotech R&D
- Moderna’s (MRNA) successful vaccine normalizing DNA alterations
- New technology enabling ‘landmark events’ in the laboratory
- Aging billionaires wanting to prolong their lifespan
CRISPR Therapeutics is at the intersection of this storm. The company’s gene-editing tool takes genetic manipulation out of science fiction novels and into the real world.
So, where is CRISPR applying this technology? Let’s look at its pipeline to see.
#2. The CRISPR Pipeline
CRISPR currently has four programs in its pipeline:
- Regenerative Medicine
- In Vivo Approaches
The company didn’t stumble into these programs – they were optimally selected based on a number of criteria, most notably where apparent advantages of CRISPR/Cas9 exist relative to traditional approaches.
CRISPR Therapeutics is furthest along in Hemoglobinopathies and Immuno-Oncology with four products in clinical stages of these programs.
In 2017, the company partnered with Vertex Pharmaceuticals to co-develop and co-commercialize CTX001, a stem cell therapy to treat patients suffering from β-thalassemia and sickle cell disease.
Vertex recently expanded its partnership with CRISPR to beat Bluebird Bio to market, adding $900 million with a $200 million incentive kicker if things go well.
#3. CRISPR Therapeutics’ In Vivo Approaches
CRISPR has four in vivo approaches that are in the research phase of development. These therapies aim to treat the following:
- Glycogen storage disease in the liver (GSD la)
- Muscle degeneration disease (DMD)
- Hypotonia weakness at birth (DM1)
- Cystic fibrosis (CF)
The in vivo approach allows gene-editing to occur inside the body versus ex vivo, which requires the cells to be removed, treated, then reinfused – a more expensive and less efficient approach to gene-editing.
CRISPR’s top competitor, Intellia Therapeutics, just had a major breakthrough using an in vivo approach to treat a rare genetic condition called Transthyretin amyloidosis, or ATTR.
Before CRISPR technology, the only known treatments for ATTR were liver transplants or generic drugs that delayed the condition compared to stopping it.
These drugs also required monthly infusions for life, in addition to severe side effects like kidney failure and blood clotting.
Shares of Intellia surged following the news, while CRISPR and other gene-editing stocks like Beam, and Editas, fell double digits.
However, the feasibility of in vivo gene-editing is good news for CRISPR Therapeutics, even if it wasn’t the first to achieve it.
#4. Future Applications of CRISPR
CRISPR technology has applications far beyond the healthcare industry. Here are some examples of CRISPR-related disruption:
- Agriculture – create more resilient or nutritionally dense crops
- Food Preservation – replace traditional food preservatives with cleaner alternatives
- Breweries – require less water for hops
- Pets & Veterinary services – prevent the spread of swine disease
- De-extinction – splice extinct species genes into compatible genomes and create hybrids
- Industrial and Materials – create new materials and chemicals
- Energy – create sustainable, renewable bio-fuel at competitive costs to pumping oil
Some of these are equally exciting and terrifying. But they underscore the potential of gene-editing and CRISPR Therapeutics’ role in that development.
This also speaks to Yuval Noah Harari’s thoughts on ‘healing to upgrading.’ Harari believes that most therapies that begin as treatments will eventually be used for upgrades.
For example, CRISPR’s CTX001 is currently used to treat mutations in an oxygen-carrying molecule in the blood.
One day, CRISPR might roll out a product for healthy babies that significantly increases their oxygen uptake capacity, allowing them to run faster, swim underwater longer, and sing better.
CRISPR Stock Forecast: Moat
The following describes CRISPR’s moat against the competition:
General Biotech Tailwinds + Category Leader + High Barriers to Entry
Note, the specific component depends on your level of focus in terms of the entire therapeutics market, biotech industry, or gene-editing niche.
There are thousands of biotech companies, but only a handful in any sub-sector pursuing the same thing.
These dynamics result in a winner-take-most market in terms of partnerships with big pharma, as seen with CRISPR’s deal with Vertex and Intellia’s deal with Regeneron.
Also, there are high barriers to entry when it comes to gene-editing, a common feature of ‘niche’ technology in the biotech industry.
So while the competition is fierce within the niche of gene-editing, there’s less of a threat to get eaten by the incumbents, like Novartis, Pfizer, and Merck.
The incumbents in the pharmaceutical industry partner with the technically capable, smaller companies instead of copying their product – because the product is difficult to copy.
CRISPR Stock Forecast & Analysis: Q4 Earnings
CRISPR reported fourth-quarter earnings on February 15, 2022 — here are the highlights:
- Revenue: $12.3 million compared to $0.2 million in the same quarter from a year prior
- Cash Position: $2.379 billion compared to $1.690 billion from the same period a year prior
- R&D Expenses: $134 million versus $82.4 million from a year prior
- Net Loss: $141 million compared to $107 million from a year prior
CRISPR executives had great things to say about the company’s partnership with Vertex, and expects their CTX001 clinical trials to reach regulatory submissions in late 2022.
The company’s quarterly earnings are as much about updates on their drugs, treatments, and therapies as they are about financials.
CRISPR Stock Forecast: The Competition
CRISPR Therapeutics isn’t the only company deploying CRISPR technology. Here are other companies in the gene-editing space:
- Regeneron Pharmaceuticals (REGN)
- Intellia Therapeutics (NTLA)
- Editas Medicine (EDIT)
- Beam Therapeutics (BEAM)
- Invitae (NVTA)
- BlueBird Bio (BLUE)
CRISPR, Editas, and Intellia have similar approaches to gene editing. Each of these companies uses the CRISPR-Cas9 enzyme that was co-invented by the founder of CRISPR Therapeutics, Emmanuelle Charpentier.
Beam Therapeutics uses base-editing, which is described as a pencil and eraser approach to editing. However, Beam trails the competition in terms of programs in advanced clinical stages.
Excluding Regeneron, all of these companies have market caps under $10 billion.
CRISPR Stock Forecast: The Risks
#1. Profitability & Dependency
Most early-stage biotechs have similar risk to reward curves.
CRSP comes with significant risk because it has a lot riding on just a handful of projects and partnerships. Its main source of revenue is the Vertex deal.
This high concentration makes CRSP more vulnerable to ‘bad news’ and hiccups in the eyes of traders.
Wall Street tends to have binary reactions to the latest headline on smaller biotechs, to the upside and downside.
But CRSP isn’t alone in this risk arena. If you’re eyeing growth stocks in the biotech space, you will find these common threads of risk in most names.
The upside doesn’t come for free.
#2. The Biotech Decade Begins in 2040
The Biotech Decade is not a matter of if, but when.
Technological advancements are difficult to predict because they typically occur gradually, then suddenly.
Therefore, it’s impossible to perfectly time CRISPR as an investment.
If you’re a long-term believer in the biotech space, you may have to stomach years of your investments trading sideways. Gene-editing costs must come down for the applications to scale.
Additionally, there are technical hurdles that CRISPR companies are still figuring out, like optimal delivery methods. And with such a new technology, the potential for long-term side effects is still unknown.
CRISPR Stock Allocation in Your Portfolio
If you’re this far in the article, you’re probably interested in owning some CRSP stock. So how much should you buy?
Consider these questions when determining your allocation:
- Is there a better upside in other biotech stocks like Moderna?
- Does CRISPR have the best approach to gene-editing, or will companies like Beam discover more efficient ways, like base-editing?
- Is Intellia a better CRISPR play than CRSP?
- Is the biotech movement happening? Or is it still decades away?
- Is there a world where the biotech industry takes off and CRSP lags?
- Is CRSP’s partnership with Vertex the only thing impacting its stock?
- Can CRISPR Therapeutics launch an approved product?
- What’s the Dow Jones Industrial Average (DJIA) up to?
- Why did Cathie Wood cut CRSP’s allocation in the ARK Genomic Revolution ETF (ARKG)?
- When will CRISPR apply its technology to industries like agriculture, weapons, and materials?
- Can CRISPR reduce the costs associated with the therapy and bring the technology to scale?
We can ask hypotheticals all day long. Hopefully, these questions help you gauge your confidence in CRISPR Therapeutics as an investment.
CRISPR Stock Forecast: FAQs
What does CRISPR Therapeutics do?
CRISPR Therapeutics is a biotechnology company that uses gene editing to create therapies. It uses CRISPR/Cas9 technology to disrupt, delete, correct, and insert DNA to combat disease.
Is CRISPR Therapeutics a good buy?
CRSP is 40% off its all-time highs of $200 per share. Shares of CRISPR Therapeutics currently trade around $120. Other gene-editing companies competing with CRSP are Editas (EDIT), Intellia (NTLA), Beam (BEAM), and BlueBird Bio (BLUE).
Where is CRSP located?
CRSP is a Swiss-American biotechnology company headquartered in Zug, Switzerland. CRSP has an R&D office in Cambridge, Massachusetts, and another office in San Francisco, California.
What does CRISPR Therapeutics sell?
CRISPR Therapeutics sells medicines for serious diseases. It has a partnership with pharma giant Vertex Pharmaceuticals to bring a sickle cell treatment to market. However, CRISPR Therapeutics does not have any approved products in its pipeline. They are either in the clinical or preclinical stages.
Bottom Line: CRISPR Stock Forecast
CRISPR Therapeutics has 300 employees and a market cap just shy of $5 billion. This is a small company with massive potential.
It’s tough to imagine a world where biotechnology advances but leaves CRISPR Therapeutics behind.
This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched Crispr stock.