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Here's Why CRISPR Therapeutics Stock Is Falling Today

By Maxx Chatsko - Nov 21, 2019 at 2:28PM

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The gene-editing pioneer announced the pricing of a public stock offering.

What happened

Shares of CRISPR Therapeutics ( CRSP 1.30% ) are falling today, down by 9.7% as of 1:53 p.m. EST, after the company announced the pricing of a public stock offering. The gene-editing pioneer said it will offer up to 4.89 million shares at $64.50 apiece, which would generate gross proceeds of up to $315 million. 

The company is wisely taking advantage of a soaring stock price to bolster its cash position, which stood at a whopping $629.7 million at the end of September. Earlier this week, CRISPR Therapeutics and its partner Vertex Pharmaceuticals announced promising data from the first two individuals dosed with CTX001. That news sent shares roaring higher, but the company has a number of programs it wants to advance in clinical trials.

A chart showing a steady rise and then a sudden fall.

Image source: Getty Images.

So what

CRISPR Therapeutics is exploring many applications for its gene-editing technology. For instance, CTX001 attempts to engineer cells in bone marrow such that the resulting red blood cells generated can function properly and relieve individuals suffering from sickle cell disease or beta thalassemia. 

The company is also developing a wholly owned immuno-oncology pipeline. Led by CTX110, these therapies will engineer CAR-T cells to better target certain receptors on cancer cells while also stripping away the genetic markers of the donor, potentially allowing T-cell-based immunotherapies to be manufactured from a single cell line rather than strictly matched from donor to patient.

CRISPR Therapeutics is also working with ViaCyte to engineer stem cells to potentially treat type 1 diabetes, with Vertex Pharmaceuticals on a range of additional programs spanning cystic fibrosis to Duchenne muscular dystrophy, and with Bayer on a range of programs in eye diseases, autoimmune disorders, and hemophilia. 

Come to think of it, CRISPR and Bayer recently changed the operating structure of their joint venture, Casebia Therapeutics, with CRISPR Therapeutics retaining more control. The financial details weren't disclosed, but the parties said that a transaction is expected to close in the fourth quarter of 2019. That could be the most specific use of cash on the horizon. 

Now what

Even after taking today's tumble into account, shares of CRISPR Therapeutics are up 112% since the beginning of the year. Given a pipeline that is (or soon will be) buzzing with activity, it makes sense for the pharma stock to bolster its cash position. 

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.

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Stocks Mentioned

CRISPR Therapeutics Stock Quote
CRISPR Therapeutics
CRSP
$79.41 (1.30%) $1.02
Vertex Pharmaceuticals Incorporated Stock Quote
Vertex Pharmaceuticals Incorporated
VRTX
$206.61 (0.68%) $1.39
Bayer Stock Quote
Bayer
BAYR.Y
$12.94 (0.94%) $0.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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