Sometimes even the professionals put the horse before the cart. For instance, Wall Street analysts are currently predicting that shares of the gene editing therapy biotech Intellia Therapeutics (NTLA 3.70%) will rise by 107% to reach a price of more than $87 within the next 12 months.

Is that estimate too sunny to be plausible, or are the company's shareholders in for a treat? As it turns out, the answer to both of those questions is probably yes. Here's why.

This stock has a credible chance of climbing, if not soaring

Analysts are almost certainly banking on the occurrence of several catalysts that will be necessary for Intellia to meet their price target by a year from now. All the potential catalysts pertain to milestones with a trio of its gene therapies in development.

The biggest catalysts that could lead to significant share price appreciation stem from its NTLA-2001 program, which is a gene editing therapy being developed to treat transthyretin (ATTR) amyloidosis. By the end of the year, management hopes to file an investigational new drug (IND) application with regulators in the U.S., which if approved, will pave the way for it to initiate a phase 3 clinical trial to test NTLA-2001 for its usefulness in treating ATTR amyloidosis with cardiomyopathy (ATTR-CM). It'll also be reporting some additional data from the medicine's phase 1 clinical trial.

In short, shareholders could see the stock rise modestly with each step that the company navigates successfully, or fall moderately if regulators have concerns that need to be addressed before moving forward. 

Before 2024, Intellia is also aiming to complete enrollment of patients in the phase 2 portion of its trial for NTLA-2002, which aims to treat hereditary angioedema (HAE). It's not common for similar events to send biotech stocks upward by much. In the same period, the company plans to submit an IND for NTLA-3001, its therapy for alpha-1 antitrypsin deficiency-related lung disease that's presently in early-stage trials. Much like with the IND For NTLA-2001, the stock could get a minor boost when the company announces the filing is submitted. 

There's also the faint possibility of the business announcing that it's initiating, deepening, or changing the terms of its collaborations. Given that its research and development (R&D) collaborators are powerful big pharma players like Regeneron and Novartis, further promises of milestone payments or direct investment would be bullish. But it's hard to see how any such developments would spur the stock to rise by more than 10% at the very best, and a move of only a percentage point or two would be far more likely.

The risks are substantial, and that won't be changing

So it's very likely that Wall Street's hopes for Intellia are way too high. Its near term simply doesn't have enough high-impact catalysts like late-stage clinical trial data updates or regulatory decisions about commercialization for its shares to double in value within a year. At the same time, in the next 12 months it won't be significantly less risky in comparison to today, as it'll still be at least a couple of years away from generating any revenue from sales of its medicines.

Furthermore, the risks it faces are significant, which is par for the course when it comes to pre-revenue biotech stocks. Any of its clinical trials could experience safety problems or report a lack of efficacy, both of which would be damaging for shareholders. And while its cash hoard of $933 million is more than enough to pay for its trailing-12-month (TTM) operating expenses of $510 million for the moment, soon enough it'll need to take out more debt, issue new stock, or get a cash infusion from its collaborators.

Any of those outcomes would likely hurt its share price in the short term. Nor is there any guarantee that it will ever be able to commercialize a medicine whatsoever, even if it gets more than enough financing. 

Nonetheless, the remainder of Intellia's 2023 will likely see the stock rise a bit further if it can deliver the catalysts management is working on, even though it already rose by 21% this year so far. The analysts are probably too optimistic in the short term, but that doesn't detract from the possibility of the company's long-term value being huge if it can sell its gene-editing therapies.

In short: Don't let Wall Street's frothy estimates deter you from buying the stock, provided that you're interested in making a risky biotech bet.