Bluebird Bio (BLUE 5.91%) and CRISPR Therapeutics (CRSP 1.81%) are two rising biotechs that specialize in gene-editing therapies to treat rare genetic blood disorders and cancer.

Bluebird's stock is down more than 16% over the past year and up more than 8% over the past three months. CRISPR's shares are down more than 27% over the past year and off more than 8% over the past three months, but the fortune of both stocks could change considerably this year.

Neither company is close to being profitable, with each earning around $100,000 in its last quarter, all on collaboration revenue. They both have attractive pipelines that could soon pay off, though. Which one of these long-term investments is the better buy? Let's find out.

The case for Bluebird Bio

Bluebird Bio's biggest edge over CRISPR Therapeutics is that it already has two gene-editing therapies approved by the Food and Drug Administration (FDA), while CRISPR is still awaiting its first FDA-approved therapy. 

Bluebird's Zynteglo, a one-time curative therapy for rare genetic blood disorder transfusion-dependent beta thalassemia (TDT), was approved by the FDA in August and is already being used on at least one commercial patient (the therapy is priced at $2.8 million), the company said this month, with revenue from the drug expected to begin in the first quarter of 2023.

The company's other approved therapy is Skysona, which received approval from the FDA in September to treat cerebral adrenoleukodystrophy (CALD), a rare progressive neurological disease that generally affects young boys. It's priced at $3 million, which makes it the most expensive drug in the world.

Beta thalassemia affects roughly 5,000 people in the United States, according to the National Center for Translational Sciences. CALD affects only 1 in 20,000 boys, according to the Child Neurology Foundation. With such small markets, the high cost of the company's therapies will further limit sales, but at those prices, it won't take many patients for Bluebird to break into the black.

The company also has another late-stage therapy, lovo-cel, to treat sickle cell disease (SCD), and the company said it expects to submit its biologics license application (BLA) to the FDA for the one-time curative therapy in the first quarter of 2023.

The case for CRISPR Therapeutics

It takes a lot of money to launch gene therapies, and CRISPR has a much bigger war chest than Bluebird Bio. As of Sept. 30, the company had $1.973 billion in cash while Bluebird, even after selling off priority review vouchers for $200 million, only has around $382 million in cash, adding in the $182 million it listed as of Dec. 31. That's enough, Bluebird said, to last it until the first quarter of 2024.

CRISPR's lead therapy is exa-cel, which it is developing with Vertex Pharmaceuticals. If approved by the FDA this year, exa-cel may have an edge on Zynteglo because its price tag is likely to be less than $2.8 million and because in trials, it appeared to be slightly more effective. Exa-cel in clinical trials was able to end the need for transfusions in 42 of 44 TDT patients, with the other two patients showing 75% to 85% reductions in the need for transfusions. It also stopped painful vaso-occlusive crises in all 21 sickle cell disease patients. Zynteglo was effective in curing 90% of TDT patients; still effective, just not as effective as exa-cel, and Zynteglo has not been approved for SCD.

While CRISPR would receive only 40% of the revenue from exa-cel with Vertex receiving the rest, the potential for the drug is huge. The companies have already filed for approval in Europe and the United Kingdom, and have a rolling BLA submission in the U.S. that they say is on track to end by the end of the first quarter of 2023.

CRISPR also has a larger and more varied pipeline than Bluebird, led by CTX110, a donor-derived CAR T-cell gene therapy that has shown promise in a single dose to treat refractory and relapsed large B-cell lymphoma. The company is also looking at CTX130, which like CTX110 is an allogenic CAR T-cell gene therapy. CTX130 has done well in early trials to treat relapsed or refractory T- or B-cell malignancies, as a potential blockbuster.

A clear choice

While Bluebird Bio has a head start in approvals, I see more long-term potential in CRISPR due to the effectiveness of exa-cel, the company's stronger cash position, and its larger pipeline. CRISPR has also been mentioned more frequently as a buyout candidate, which would, of course, award current shareholders.