A solid clinical trial update convinced several Wall Street analysts to raise their price targets for CRISPR Therapeutics (CRSP -8.08%) on Thursday. Those new expectations include a bold $170 target from investment bank Needham -- about 16% higher than the biotech's closing price Wednesday.
The candidate generating all this enthusiasm is CTX001, an experimental therapy for two hemoglobin-based disorders: beta-thalassemia and sickle cell disease. CRISPR Therapeutics is developing it in partnership with Vertex Pharmaceuticals (VRTX -1.07%). This single-application treatment involves reengineering a patient's own stem cells to produce fetal hemoglobin once they've been reinfused, and it appears to work as intended.
At the latest update, seven beta-thalassemia patients had been under post-therapy observation for least three months, and so far, none have required transfusions. Among three patients with sickle cell disease who also have been observed for at least three months, none have experienced a vaso-occlusive crisis since undergoing the therapy.
CRISPR Therapeutics has also administered CTX001 to 10 patients who hadn't had their three-month observations in time for their data to be included in the company's recent presentation. In the summer of 2021, though, we should know if CTX001 has a shot at competing against LentiGlobin, an experimental treatment from bluebird bio (BLUE -40.54%).
LentiGlobin aims to treat the same limited groups of patients as CTX001, and it's been in development longer. Recently, bluebird bio published results from BCL11A, a treatment that more closely resembles CTX001, and the early data looks competitive.
There is a good chance that CTX001 and experimental cancer treatments rolling through CRISPR Therapeutics' pipeline will drive the stock to $170 and beyond. However, based on the potential for competition from bluebird bio, and considering the usual issues that clinical-stage biotechs must navigate, the company faces significant risks. Investors who buy this stock should only do so within a well-diversified portfolio.