There's no shortage of promising gene-editing stocks on the market for investors to choose from. Both CRISPR Therapeutics (CRSP -3.44%) and Intellia Therapeutics (NTLA -0.23%) have caught plenty of attention for their promising drug candidates, many of which have the potential to become major blockbusters.
However, the two companies also have differences that investors should keep in mind. Let's go over what sets these two biotech stocks apart, where they overlap, and which is a better investment at this time.
CRISPR is one of the oldest and most established players in the gene-editing field, although considering just how young the industry is, that might not mean as much as it would in another sector. The company has nine drug candidates, but only four are either in clinical testing or close to beginning trials.
Among the most promising is CTX001, the company's sickle cell disease and transfusion-dependent beta-thalassemia drug. These two genetic blood disorders affect the blood's ability to transport oxygen throughout the body. Considering that there are no cures for either of these conditions, a gene-editing drug that resolves these disorders would be in high demand; around 100,000 people in the U.S. have sickle cell disease.
CRISPR's other three clinical-stage drug candidates are CTX110, CTX120, and CTX130, a trio of cancer-immunology drugs. More specifically, they are a type of advanced cancer treatment known as a chimeric antigen receptor T cell (CAR-T) therapy. They work by modifying a patient's immune cells (specifically the T cells) in a laboratory to make them more effective at killing cancer cells.
While effective, CAR-T cell therapies are very expensive, costing hundreds of thousands if not millions of dollars. CRISPR's own CAR-T drugs, using gene-editing technology, could potentially be cheaper than their counterparts.
Intellia has seven candidates in its pipeline, but all of them are in either research, candidate selection, or preclinical testing phases. Just like CRISPR, Intellia has its own sickle-cell disease candidate on the cusp of moving to initial clinical testing, although the program hasn't been given an official name yet. Instead, it's just listed as a "sickle cell disease" drug on the company's website.
Another preclinical program that's showing progress is NTLA-5001, a drug that would treat acute myeloid leukemia (AML). This is a rare type of cancer found in the bone marrow that causes the production of abnormal red and white blood cells. As these abnormal cells (also called leukemia cells or blasts) build up in the bone marrow, they leave less room for normal blood cells to develop. The five-year survival rate for patients with AML is just 27.4%, with the condition accounting for 32% of all adult leukemia cases. While sickle cell disease doesn't yet have any treatments, the U.S. Food and Drug Administration (FDA) has already approved a number of AML drugs, so NTLA-5001 will still have to compete with other drugs for market share.
The last candidate to note is NTLA-2001, a treatment for transthyretin amyloidosis. This is a rare condition characterized by buildups of protein deposits called amyloids throughout the body. These buildups occur most frequently in the peripheral nervous system, causing the loss of sensation in one's extremities, but they also occur in the internal organs. Transthyretin amyloidosis remains quite rare, occurring in just one in 100,000 people. However, there's no treatment available right now that cures the condition, so NTLA-2001 would be in high demand among this patient group. The drug remains in preclinical development at the moment.
Looking at the financials
When it comes to early-stage biotech stocks, looking at traditional financial metrics like price-to-sales (P/S) and other ratios isn't the best way to judge companies. Since both CRISPR and Intellia still have a long way to go before any of their candidates are widely available, sales (likely from collaboration agreements) at this early stage aren't the most important metric.
Still, CRISPR's financials look a lot better than Intellia's. In the company's recent Q4 2019 financial report, CRISPR announced quarterly revenue of $77 million, a remarkable increase from the $100,000 reported in the previous year. While this extra influx of cash isn't related to product sales but rather to collaboration agreements with Vertex Pharmaceuticals, it's a major increase nonetheless.
The company's cash position is also quite healthy, sitting at $943.8 million, which is more than double the $456.6 million reported a year ago. Overall, CRISPR managed to do something quite rare in the early-stage biotech landscape: report a profit. Net income was reported at $30.5 million, a major improvement from the $47.6 million loss seen back in Q4 2018.
|Company||Market Cap||Quarterly Revenue||Net Income (Loss)||Cash|
|CRISPR Therapeutics||$3.40 billion||$77.0 million||$30.5 million||$943.8 million|
|Intellia Therapeutics||$677 million||$10.6 million||($24.6 million)||$295.8 million|
On the other hand, Intellia's financials are in a much different state. The company reported only $10.6 million in collaboration revenue, a 43% increase from the $7.4 million seen last year but still not that high compared to CRISPR. Net losses are at $24.6 million, relatively the same from Q4 2018, while Intellia's cash position is sitting at $295.8 million.
For an early-stage biotech stock, this is pretty decent. Intellia has enough cash on hand to last at least three years at the current rate of expenditure, so investors don't need to worry about the company running out of cash anytime soon.
Which is a better buy?
Both gene-editing companies have a lot going for them. CRISPR and Intellia both have promising drug candidates in the works right now, along with enough cash to finance their development for quite some time. However, investors need to remember that nothing's certain in the world of early-stage biotech development.
If you're comfortable with the high-risk, high-reward nature of biotech investing, then compelling cases can be made for both stocks. However, CRISPR Therapeutics really seems to be the better investment, all things considered. Its lead drug candidates are farther ahead in clinical development (if only a little) than Intellia's. Financially, CRISPR has seen a dramatic improvement in all its key financial metrics, including revenues and cash position. Most significantly, it's reporting a profit.
Things can definitely change in a few years, but right now, I think CRISPR Therapeutics is the better of the two companies.