U.S. stocks tumbled last Friday, extending their selloff in the wake of dour economic reports and closing the book on a holiday-shortened week fraught with new tariff threats and worries of softening consumer demand.
All three major U.S. stock indexes moved decisively lower on the heels of the data, but the best-performing concepts are Gene Editing stocks.
Considering the different perceptions of the stock, this time TigerPicks chose $CRISPR Therapeutics AG(CRSP)$ to have a fundamental highlight to help users understand it better.
$CRISPR Therapeutics AG(CRSP)$
CRISPR Therapeutics engages in the development and commercialization of therapies derived from genome-editing technology. Its proprietary platform CRISPR/Cas9-based therapeutics allows for precise and directed changes to genomic DNA. The company was founded in 2014 and is headquartered in Zug, Switzerland.
A Biotech Powerhouse in the Making
Crispr Therapeutics has enormous potential in the biotech market. Recent news of lower-than-expected enrollment numbers for its Casgevy treatment stymied the upward price movement, but the business’s prospects remain the same if not slightly improved. The company is incredibly well capitalized, they have a very valuable partner in Vertex, and they should realize revenue in the next 6–12 months. It is evident that my initial estimate of revenue being generated sooner than that was a bit optimistic, as revenue is deferred until the end of patient treatment cycles, but the signs point to a strong business.
They remain the market leader as a pure-play in the next generation of biotechnology, that is gene editing and Crispr-Cas9-based technology. With multiple drug candidates in their pipeline to support their growth over the coming years and decades, their chances of success are increasing over time. I look forward to the various important updates coming over the coming quarters. Investors with patience will be well rewarded here, in my opinion.
Crispr has provided updates across a number of their research areas. For Casgevy, their first and only approved treatment that is led by Vertex, they have made progress in developing authorized treatment centers (ATCs).
Crispr also recently announced several updates in their drug pipeline. From their most recent mid-January update, they are leading 5 clinical programs and 10 preclinical programs – a very impressive number in my estimation – and they expect to reach significant milestones in 2025.
Graphic showing 2025 milestones
Investors Need To Be Patient
Crispr Therapeutics' share price has oscillated between ~$40 and ~$80 since the beginning of 2022. It previously reached highs of >$200 per share and >$150 per share, primarily related to the promise of Casgevy and Vertex's ~$900m payment to increase its share of Casgevy profits from 50%, to 60%.
Unlike other companies working with CRISPR/Cas9, Crispr has brought an extremely valuable therapy in Casgevy all the way to market, showing in the process that it is the most dynamic CRISPR/Cas9 drug developer out there.
Crispr is making solid headway addressing this issue with lipid nanoparticles — like those used in the COVID-19 vaccines developed by $Pfizer(PFE)$ and $Moderna, Inc.(MRNA)$ , gentler preconditioning, and allogeneic therapies. That's why I typically look beyond the day-to-day share price movements, and instead focus on the progress of the science and the studies.
By 2028, Crispr Therapeutics could be a billion dollar revenue company through Casgevy alone. This more than justifies the current market cap in my view (don't forget the $1.6bn of cash either), while the remainder of its pipeline, if projects are successful, could easily add another $10bn to the market cap.
A more sobering take is to look at Sana's market cap valuation of <$650m, despite its in-vivo success, apply a dose of realism, and wonder if these drug developers can achieve the lofty goals they have set themselves.
This perspective will put off many investors, and likely keep the share price down, but if you are a believer in the work Crispr is doing, like I am, you'll keep holding its stock and monitoring progress.
With some major data readouts upcoming in 2025, and potentially some meaningful Casgevy revenues also later in the year, this does not feel like a bad time for shareholders to be adding to their position.
Stock Price Forecast:
Here are the target price forecasts for the next 12 months from analysts.
Based on 21 Wall Street analysts offering 12 month price targets for Crispr Therapeutics AG in the last 3 months. The average price target is $70.25 with a high forecast of $120.00 and a low forecast of $32.00. The average price target represents a 46.63% change from the last price of $47.91.
Resource:
https://seekingalpha.com/article/4757888-crispr-therapeutics-q4-earnings-review-ignore-the-lack-of-revenues-buy-the-future
https://seekingalpha.com/article/4755233-crispr-therapeutics-why-ive-become-even-more-bullish-rating-upgrade
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