With shares of CRISPR Therapeutics (CRSP 0.34%) down by 40% over the last 12 months, some investors might rightly wonder if this young biotech has lost its way. But the market has been hard on biotechnology stocks in general of late.

And now, thanks to a pair of potential new drug launches in the next year and industry-leading technology, CRISPR is likely to see bright days -- and it has a strong balance sheet to get it there. So if you've been eyeing this stock, let's see why now might be a good time to add it to your portfolio.

Why there's a dip

To appreciate why it might be appealing to buy this stock on the dip, it's critical to appreciate why its shares are down in the first place. CRISPR Therapeutics doesn't have any medicines on the market just yet, so its earnings reports aren't what caused its shares to fall so much recently. Nor did any of its ongoing clinical trials report sub-optimal results.

In fact, pretty much the only causes for any type of disturbance in the last year or so were the departures of its chief operating officer and chief financial officer, both of whom have since been replaced. And neither of those executive changes made much of an impact on the stock price whatsoever. So what gives?

As it turns out, the bear market was a difficult period for pre-revenue biotech stocks pretty much without exception. Now that the bear market looks to be over, CRISPR's stock is recovering promptly, with its shares rising by 19% so far this year, even without positive catalysts occurring -- and there could be some helpful ones ahead.

By the end of the first quarter in 2024, the Food and Drug Administration (FDA) will have weighed in on whether the company's exa-cel gene therapy candidate is safe and effective to treat two conditions: beta thalassemia and sickle cell disease. Exa-cel, developed in collaboration with Vertex Pharmaceuticals could be its first product to generate sales revenue, and it could treat as many as 30,000 people in the U.S. and the E.U. 

A good time to consider the stock

The argument for buying the dip also goes beyond exa-cel. First it's far from the only program in this biotech's repertoire.

In the long-term, CRISPR will be advancing its potentially curative programs to treat hereditary illnesses like hemophilia. At the moment, most of those highly ambitious projects are still in pre-clinical testing. But over the next few years, that'll change, and when these programs enter clinical trials in humans, the biotech will enter the annals of medical history even if it ultimately falls short of its goals. Attempting to cure inherited diseases via editing the genes of living people is quite impressive, to say the least.

Meanwhile, CRISPR has nearly $2 billion in cash and equivalents despite investing heavily in research and development (R&D) to advance its pipeline programs for years. It only burned $532 million of its cash in 2022, and it has around $228 million in capital-lease obligations, with nothing in the way of long-term debt. That means it won't need to raise more money by issuing more debt or by offering more shares of its stock anytime soon. It also means that if regulators demand additional clinical trials to answer key questions in advance of getting exa-cel out the door, it has the resources ready to do so.

If you decide to buy the dip in CRISPR Therapeutics, be aware that it's a risky bet. There isn't any reason to believe that the exa-cel approval will get the thumbs down, but anything is possible. Likewise, the longer you hold onto the stock, the more likely you will be to hold it during an inevitable setback in clinical trials. But with its multiple therapy commercialization attempts already in play, this company should be able to survive any bumps in the road.

So if you're cool with the risks, buy the dip today as it might not be any less expensive in the future.