Gene-editing biotechs are hard at work to create the treatments and cures of tomorrow, and any businesses that succeed are likely to be great investments. Of course, it's complicated to figure out which are going to soar and which will languish, so it makes sense for investors to keep a bunch of promising options on their watch list to monitor over time.

Then, when the companies have reached a point in their development that fits with your risk profile, it'll be time to start a position. Let's examine a pair of cutting-edge gene editors so that you'll have a few more ideas about which are worth paying attention to and why.

1. Wave Life Sciences

Wave Life Sciences' (WVE -1.69%) stock is up 48% in the last 12 months, and while it may take a while for investors who buy it today to see similar returns, it's definitely a company worth keeping track of now.

It has a trio of programs in early-and mid-stage clinical trials, all of which are gene-editing therapies for rare diseases like Duchenne muscular dystrophy (DMD) and alpha-1 antitrypsin deficiency (AATD). While its DMD candidate is unlikely to be curative, as it requires ongoing dosing rather than actually permanently changing patients' genes, it could still deliver transformative relief because the patients it's targeting have no other options as of now.

Wave will be reporting key data from its DMD and AATD programs in 2024, which could be catalysts for the stock to rise. But, it'll be years before any of its medicines reach the market, assuming they ever do. 

In terms of its balance sheet, Wave has $173 million in short-term investments, cash equivalents, and cash, and its trailing-12-month operating expenses are also $173 million. That means it'll probably need to raise money in about a year. It's also possible that its collaboration with GSK, which has the potential to pay out up to $3.3 billion in development milestones, will help the biotech to stay liquid. Don't be too surprised if the company advances a few of the collaboration programs into the clinic over the next year, generating some buzz in the process. 

At the same time, it's probably best to avoid jumping into this stock today. A lot could go wrong for the early-stage biotech over the next few years, and the fact that Wave is competing at the frontier of medicine makes the chances of a stumble much higher. Even if its therapies work as advertised in their clinical trials, it is very likely that regulators at the Food and Drug Administration (FDA) will be scrutinizing the results as well as every element of the company's manufacturing process.

Plus, as long as it only has a year's worth of liquidity on hand, Wave Life Sciences will be in a race against time to advance its pipeline, which could spell bad news for shareholders.

2. Beam Therapeutics

Much like Wave Life Sciences, Beam Therapeutics (BEAM -1.02%) is a pre-revenue biotech that's just now dipping its toes into a couple of phase 1/2 clinical trials in rare disease and oncology. One of its clinical-stage candidates aims to treat sickle cell disease (SCD) and beta thalassemia, and another is intended for T-cell acute lymphoblastic lymphoma and leukemia (T-ALL/T-LL) as well as acute myeloid leukemia (AML). 

Right off the bat, savvy investors know that its chances of success with its SCD and beta thalassemia therapy are limited. Bluebird Bio and CRISPR Therapeutics both have gene therapies for those conditions that are either already on the market or could be approved within a year. So by the time its candidate has a shot at approval, the market will already be crowded. But there might not be a similar problem with its cancer therapy, which will need a few more years in the clinic.

Its pre-clinical programs include a potentially curative candidate for AATD, which could put it in direct competition with Wave down the line. Still, one relevant concern for investors is that it doesn't have any major catalysts to speak of through at least the first half of 2024, so you'll need to be patient if you buy the stock now.

While its shares are down by 55% in the last 12 months, Beam's balance sheet looks pretty good, with more than $1 billion in cash and investments, and trailing-12-month operating costs of only around $461 million. So it should have at least two years of advancing its pipeline programs before it might need to consider cutting its research and development expenditures. It also has a collaboration with Pfizer that could yield as much as $1 billion in milestone payments.

Overall, investors should approach Beam Therapeutics as an early-stage biotech that's still quite risky despite its enviable cash hoard and a powerful collaborator in its corner. You'll probably need to hold on to this stock for at least three or more years before it realizes a dollar in revenue, if it ever does. But in a field that's as rapidly evolving as gene editing therapies, Beam is well-positioned, and it may well make early shareholders richer.