Originally posted on https://financhill.com/blog/investing/crispr-therapeutics-stock-forecast
CRISPR Stock Forecast: Genome editing has passed from science fiction to science fact. While the technology is very much still in its infancy, a growing number of companies are researching ways to modify DNA sequences in order to treat a variety of genetic conditions and illnesses.
CRISPR Therapeutics [NASDAQ: CRSP] gene editing is a form of genome editing technology that makes use of Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR), which are a series of short DNA sequences that repeat at regular intervals, separated by “spaces” in between them.
These CRISPR sequences are always accompanied by Cas (CRISPR-associated) proteins, which produce enzymes that can act as “scissors” to more efficiently cut into the DNA sequence, removing the undesirable gene or replacing it with a more desirable one.
Scientists have thus far used CRISPR to do everything from treating puppies with muscular dystrophy to improving the strength and elasticity of silkworm silk – and there’s a growing body of evidence that CRISPR techniques are effective for many human conditions as well.
Companies such as CRISPR are investigating the use of this trendy technology, eliciting a lot of interest from investors. But is CRISPR Therapeutics stock a buy, or should you think twice before purchasing shares of CRSP?
What Does CRISPR Therapeutics Do?
CRISPR Therapeutics [NASDAQ: CRSP] is a biopharmaceutical and genome editing company that is headquartered in Zug, Switzerland with U.S. research and development operations in Boston.
The company was founded in 2013, and the current CEO is Samarth Kulkarni, who has served in the role since 2017. The competitors of CRISPR Therapeutics include other genome editing companies such as Editas Medicine, Intellia Therapeutics, eGenesis, and ToolGen.
Specifically, CRISPR Therapeutics’ main product is CTX001, a gene therapy for treating hemoglobin disorders such as beta thalassemia and sickle cell disease. The treatment is ex vivo, meaning that cells are edited outside the patient’s body and then reintroduced. CRISPR Therapeutics was the first company to begin a clinical trial using CRISPR gene editing.
CTX001 is currently in two phase 1/2 clinical trials, which have an expected completion date of February 2021. However, CTX001 is not CRISPR Therapeutics’ only CRISPR treatment in the works: it also has three proposed immunotherapy treatments that will enter clinical trials after the CTX001 studies have finished.
Is CRISPR Therapeutics a Buy?
As you might guess from the description above, CRISPR Therapeutics has a lot riding on the outcome of its CTX001 clinical trials – and so do the company’s investors. Based on the promise of the treatment it’s developed, CRISPR Therapeutics has already reached a market capitalization of $2.7 billion.
CRISPR Therapeutics [NASDAQ: CRSP] also has a healthy supply of cash: $438 million as of Q1 2019. What’s more, this pile of cash is expected to increase by $175 million in the near future.
The company has signed a recent deal with the biopharmaceutical company Vertex, with which CRISPR Therapeutics is developing the CTX001 treatment, to create potential gene therapies for Duchenne muscular dystrophy and myotonic dystrophy type 1.
Although it’s still in the early stages, CRISPR Therapeutics is also working with the regenerative medicine company ViaCyte to develop an ex vivo genome editing treatment for type 1 diabetes, which could be extremely lucrative if effective. However, the treatment isn’t expected to enter a clinical trial until 2024, so short-term and medium-term investors
What are the Risks of Buying CRISPR Therapeutics?
CRISPR Therapeutics [NASDAQ: CRSP] is a high-risk, high-reward stock right now. The most obvious risk is that the CTX001 clinical trials will conclude without satisfactory results, leaving the company to fall back on secondary alternatives.
CTX001 does not directly edit the red blood cells that are affected by hemoglobin disorders, but rather the stem cells that are responsible for red blood cell production. This fact adds complexity and uncertainty to the process, casting more doubt on the treatment’s likelihood of success.
More generally, the field of genome editing is currently fraught with controversy due to fears about unethical scientific activities and negative consequences of the technology. In 2018, a Chinese scientist sparked international outcry after announcing the birth of the world’s first gene-edited children.
The Chinese government has drafted new regulations in response to the controversy that would hold gene editors responsible for any harmful effects to humans or human embryos. While the legal landscape in the U.S. for genome editing remains relatively clear, there’s no telling how things could evolve in the future.
CRISPR Therapeutics Stock Forecast
While there’s a lot to be optimistic about when it comes to CRISPR Therapeutics stock, there’s also enough to give investors some pause as well, mainly the possibility that its flagship CTX001 treatment will fail.
The good news, though, is that CRISPR Therapeutics [NASDAQ: CRSP] has wisely diversified its portfolio, giving the company several backup plans to avoid this worst-case scenario.
Buying CRISPR Therapeutics stock may be a wiser move if you already have experience in biotechnology investing, due to the scientific background required to understand the intricacies of genome editing.
If you feel comfortable with the ins and outs of the technology, you may also be interested in the stock of two of CRISPR Therapeutics’ biggest competitors: Editas Medicine and Intellia Therapeutics.