Shares of Vertex Pharmaceuticals (VRTX 1.97%) are up more than 19% over the past 12 months during a period in which many other gene-editing biotech stocks tumbled.
It's easy to see why investors are piling into the stock. The company is profitable thanks to its cystic fibrosis therapies, and its key CRISPR-editing therapy, exa-cel, is waiting for approval from the Food and Drug Administration (FDA) to treat sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT).
It might be too late to get in on the Vertex run-up, but there's another CRISPR-editing company that could be an even better long-term buy, one that Vertex is already collaborating with on exa-cel: CRISPR Therapeutics (CRSP 0.44%). CRISPR is up more than 17% this year, so the secret is getting out, but it is still down over 20% over the past 12 months.
Three reasons CRISPR is a solid long-term investment:
1. CRISPR will also benefit when exa-cel is approved
CRISPR will get 40% of exa-cel's revenues if the therapy is approved. That would provide a strong basis for growth for the clinical-stage biotech as it seeks to develop the other drugs in its pipeline.
Exa-cel's regulatory submissions were validated in the European Union and United Kingdom in December, and Vertex and CRISPR have said they expect to complete their biologics license application (BLA) submission for the therapy in the U.S. this quarter.
There's no guarantee the FDA will approve the BLA for exa-cel, but its impressive Phase 3 trial results have made people pay attention. In the gene-editing therapy's CLIMB-121 study to treat SCD, all 31 patients were free of vaso-occulsive crises after 2 months to 32.3 months. In the therapy's CLIMB-111 study to treat TDT, 42 of the 44 patients were transfusion free after 1.2 months to 37.2 months after treatment.
Both diseases are relatively rare. According to the National Center for Advancing Translational Sciences, fewer than 5,000 Americans are affected by TDT. And according to the Centers for Disease Control, SCD affects around 100,000 in the U.S.
Because exa-cel appears to be a curative therapy, insurance companies could be willing to pay for it, even if it is expensive. And it likely will be. Exa-cel could be priced in the same range as TDT gene therapy Zynteglo from Bluebird Bio, which that company said will cost patients $2.8 million.
2. CRISPR's other pipeline candidates are showing promise
CRISPR has 22 programs in its pipeline. Though none of them are as far along in development as exa-cel, a couple show promise in early-stage trials. CRISPR has already achieved proof of concept for two other wholly owned therapies, CTX110 and CTX130, both of which use allogenic CRISPR/Cas9 gene-edited CAR-T cell editing.
CTX110 is in the midst of a Phase 2 trial to target CD19+ B-cell malignancies, including B-cell lymphoma, acute lymphoblastic leukemia, and chronic lymphocytic leukemia.
CTX130 targets the CD70 protein to treat solid tumors and blood disorders. As a treatment for kidney cancer on heavily pre-treated patients, it showed a 77% disease control rate. The therapy did well enough in its ongoing Phase 1 COBALT-LYM trial that the FDA gave it a Regenerative Medicine Advance Therapy designation to treat relapsed or refractory T-cell malignancies.
The company is also collaborating with ViaCyte (which is being bought by Vertex for $320 million) on VCTX-210 to treat type 1 diabetes. The therapy is an allogenic beta-cell replacement therapy using CRISPR/Cas9 editing. In both cases, as with exa-cel, a patient's own stem cells are re-engineered and then reinserted into their bodies to help their immune systems better fight the disorders. The therapy just completed the dosing stage of its Phase 1 trial.
3. No moat but no shortage of possibilities
CRISPR Therapeutics isn't the only CRISPR-editing company in business, so it doesn't have a structural moat.
However, its CRISPR-Cas9 editing technique could target plenty of diseases, because it could be effective against any genetic disease caused by a single mutation. There are 20,000 to 25,000 genes in the human genome. There are at least 10,000 diseases with single-cell mutations, including cystic fibrosis, hemophilia, muscular dystrophy, and Huntington's disease, among others.
CRISPR is in an excellent position to continue its pipeline's development. As of December 31, the company reported cash and equivalents of $1.87 billion on its balance sheet. It did not generate any revenue in 2022, though it reported a loss of $650.2 million for the year as part of R&D and other operating expenses.