Both CRISPR Therapeutics (NASDAQ:CRSP) and Vertex Pharmaceuticals (NASDAQ:VRTX) are biotech stocks that have plenty of positive things going for them. In fact, these companies happen to be partners in an ongoing project to treat genetic diseases via gene-editing technologies. Yet despite this commonality, these stocks are radically different from one another, and each has its own unique upside potential.

While the much larger and better-established Vertex might seem like a strong pick, especially considering its long-term pipeline of preclinical and clinical treatments, I'd argue that its growth potential isn't as promising as that of CRISPR. Below, I'll explain exactly why, if I had to pick, I'd buy shares of CRISPR before Vertex.

A laboratory technician conducting a scientific test in a lab.


A look at both companies

This isn't to say that Vertex is a bad investment by any means. While the $42.9 billion biotech giant might have fallen 12.4% over the past six months, whereas CRISPR has gone up by 19.5% during that same period, the long-term prognosis for Vertex remains strong. Vertex's bread and butter come from the sales of its cystic fibrosis drugs Orkambi, Kalydeco, and Symdeko. The three drugs target different groups of cystic fibrosis patients but remain fairly similar. At the same time, the company has made progress in its plans to diversify. Earlier this year, it announced it would cough up $950 million to buy out Semma Therapeutics, acquiring a highly promising type 1 diabetes treatment in the process.

While the long-term picture looks good for Vertex, CRISPR Therapeutics has its own major upsides. With a market cap of just $2.32 billion, CRISPR is only a fraction of Vertex's size and has much more room to grow. Unlike Vertex, which already has major treatments under its belt, CRISPR is still at the preclinical and clinical stages for most of its flagship treatments. Despite this, investors and analysts are so enthusiastic about the company's chances in the promising gene-editing market that they've pushed its market cap up to the $2.3 billion mark. This is well above all of its other rivals in the space such as Editas Medicine (NASDAQ:EDIT) and Intellia Therapeutics (NASDAQ:NTLA), which have market caps of $1.1 billion and $652.5 million, respectively.

The gene-editing market

Much of the reason I consider CRISPR a superior growth stock comes down to the specifics of the gene-editing market. While it might sound like science fiction that we can edit our genes through drugs, CRISPR has done exactly that with the advent of its iconic CRISPR Cas9 gene-editing technology.

The global gene-editing market was initially estimated at just $2.25 billion back in 2015. Since then, the market has quickly grown to $3.7 billion in 2019, and current estimates predict this figure will jump to $9.66 billion by 2025. In comparison, the cystic fibrosis market, which is Vertex's primary source of revenue, is estimated to reach $13.9 billion by 2025.

Although this seems better, investors need to consider that the cystic fibrosis arena is already crowded with a number of pharmaceutical competitors. Besides Vertex, the $110 billion pharma giant AbbVie (NYSE:ABBV) is also a player (although some of its recent clinical trial data has been mediocre in comparison to Vertex's results), and Gilead Sciences (NASDAQ:GILD) has a cystic fibrosis drug, Cayston, that Vertex has to compete with as well.

In comparison, CRISPR has fewer competitors in the gene-editing market, with most analysts considering Editas to be its primary rival despite a market cap just half that of CRISPR. I would argue that being the big fish in a somewhat smaller pond is preferable for a growth stock.

CRISPR's potential solutions

CRISPR Therapeutics has a number of potential breakthrough solutions on the horizon. Focusing on genetic disorders, its flagship treatment called CTX001 targets patients with sickle cell disease and thalassemia. At the moment, there are few convenient treatment options for patients with either disease. Researchers are studying the potential of bone marrow transplants, but should CTX001 receive FDA approval, it could become the drug of choice for the majority of sickle cell patients.

At the same time, CRISPR is also developing a number of cancer drugs. While other pharma companies such as Novartis (NYSE:NVS) and Gilead have their own cancer treatments -- all of them CAR-T therapies, to be specific -- these are quite slow and expensive for the ordinary person. CRISPR's technology could potentially solve these problems, as the typically arduous process of training a patient's own system to fight cancer cells can be made much quicker through gene-editing technology. In this sense, despite the competition, CRISPR's expertise in gene editing could easily put it above its rival drugs in cost, efficiency, and expediency.

Even if these two breakthrough areas aren't as successful as initially expected, the main strength behind CRISPR Therapeutics is its versatility. Even if its sickle cell or cancer drugs turn out to be unexpected failures, it can quickly shift toward another genetic disorder, of which there are many to choose from.

Which biotech has better growth?

Both Vertex Pharmaceuticals and CRISPR Therapeutics are solid biotech investments. The former is a strong, long-term pick with an initial lead on the cystic fibrosis market despite plenty of competition. The latter is a much smaller company that's also currently a leader in its area of expertise. Although gene editing is a smaller market at the moment, it comprises fewer competitors for CRISPR to deal with.

However, if I had to say which stock is a superior growth investment, I'd lean toward CRISPR Therapeutics. The potential of the gene-editing space is so significant, with so many potential genetic diseases that can be treated this way, that a company like CRISPR is likely to find a breakthrough sooner or later. With its market cap sitting at just $2.3 billion as opposed to Vertex's $42.9 billion, it also has much more room for exponential growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.