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Why Crispr Therapeutics AG Stock Bolted Higher in January

By George Budwell - Feb 8, 2018 at 1:35PM

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Gene-editing stocks as a class jumped last month, and the growth party might be just getting started.

What happened

Shares of the gene-editing company Crispr Therapeutics AG (CRSP 4.97%) gained a stately 67.2% in January, according to S&P Global Market Intelligence . The catalyst? A Wall Street Journal article revealing that Chinese scientists have been testing CRISPR-Cas9 gene-editing systems in humans for a couple of years now. American scientists, by contrast, are only now preparing to launch human trials of such gene therapies. 

A man holding a holographic image a DNA double-helix.

Image Source: Getty Images.

So what

A recent study, published ahead of its official peer-review, suggested that CRISPR-Cas9 based therapeutics might be too toxic for use in humans. If true, Crispr, and its fellow gene-editing brethren, may be sent back to the drawing board to look for a feasible workaround.

That Chinese trials have apparently been on going since 2015 clearly suggests otherwise -- although it's also important to note that safety is rarely an overriding concern in China. As such, investors probably shouldn't put much stock into these Chinese trials as being definitive signs that CRISPR-Cas9 systems can be safely used in humans. 

Now what

Crispr and its partner Vertex Pharmaceuticals (VRTX 1.96%) are working to launch the first clinical trials for their gene-therapy, CTX001, as a potential treatment for beta-thalassemia and sickle-cell disease later this year. Before this seminal event even occurs, however, Crispr may no longer be a standalone entity.

Gilead Sciences (GILD 0.89%), for example, just stated in its recent earnings call that it's actively looking to add a gene-editing platform to their portfolio. Crispr, as a leader in the field, is an obvious and logical acquisition target for a company that's banking its future on next-generation cancer therapies.

Even without an acquisition, though, Crispr's shares should continue to benefit from growing interest from investors in its niche. So while a clinical or regulatory setback is a real risk that shouldn't be brushed off by those considering opening a position, Crispr's stock may be worth looking at as a speculative growth play.  

 

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Stocks Mentioned

CRISPR Therapeutics Stock Quote
CRISPR Therapeutics
CRSP
$63.79 (4.97%) $3.02
Vertex Pharmaceuticals Incorporated Stock Quote
Vertex Pharmaceuticals Incorporated
VRTX
$287.32 (1.96%) $5.53
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
GILD
$62.36 (0.89%) $0.55

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