What happened
Despite another less-than-stellar Consumer Price Index report and more volatility among regional bank stocks, growth equities, on balance, were on the upswing this week. The tech-heavy Nasdaq Composite, for instance, edged higher by nearly 3% during the first three and a half days of trading this week, according to data provided by S&P Global Market Intelligence.
Among the best performers within the growth stock landscape this week were biopharmaceuticals. During the same period, the gene-editing pioneer CRISPR Therapeutics (CRSP 1.68%) saw its shares jump by a healthy 24.6%, shares of the central nervous system drug developer BioXcel Therapeutics (BTAI 8.07%) rose by 19.8%, and the equity price of the genetic medicine company Verve Therapeutics (VERV +0.00%) stormed higher by a noteworthy 11%.
So what
Why were these biopharma stocks churning higher in this volatile market? CRISPR has been steadily marching northward in anticipation of a possible regulatory approval for its gene-edited blood disorder therapy exa-cel. Exa-cel is being co-developed with rare disease specialist Vertex Pharmaceuticals, which bodes well for the therapy's commercial ramp (assuming approval).
NASDAQ: CRSP
Key Data Points
BioXcel Therapeutics, on the other hand, has been on the rise following an overall positive first-quarter earnings report earlier this week that highlighted multiple upcoming data readouts for its most important value driver, BXCL501.
Specifically, the company said it expects to announce top-line results for the drug in several high-value indications such as major depressive disorder and schizophrenia-associated agitation in the coming months. If all goes according to plan, BioXCel may have a bona fide franchise-level drug on its hands. Time will tell.
NASDAQ: BTAI
Key Data Points
Verve, for its part, largely maintained radio silence this week, except for the announcement of an upcoming fireside chat at the RBC Capital Markets' 2023 Global Healthcare Conference on Tuesday, May 16. As a result, the genomic medicine company's shares appeared to rise mostly in sympathy with CRISPR and other gene-based therapeutic companies this week.
Gene-editing stocks, on balance, have been rebounding this year following their sharp pullback during the 2022 bear market. With several companies on the cusp of announcing major milestones in the field, investors appear to be circling back to this group of beaten-down equities.
Now what
Are any of these red-hot Nasdaq stocks still worth buying? Among these three biopharma plays, CRISPR arguably stands out as the best of the bunch. It has a cash position of nearly $2 billion, a burgeoning pipeline of immuno-oncology and rare disease treatments, and its partnership with Vertex should take a lot of the pressure off in terms of launching a novel therapeutic like exa-cel. Vertex, after all, is one of the most experienced biopharmas in the world when it comes to launching groundbreaking treatments for rare conditions.
That doesn't mean that BioXcel and Verve won't be winning plays for shareholders. However, these two companies have more work to do to prove their core value propositions to prospective shareholders. Meanwhile, CRISPR is on the verge of possibly becoming the first company ever to bring a gene-edited product to market.
