Better Gene Editing Stock: Editas Medicine vs. CRISPR Therapeutics

If you've ever thought about investing in the gene-editing biotech space, Editas Medicine (EDIT 1.92%) and CRISPR Therapeutics (CRSP 0.34%) are doubtlessly familiar to you. While neither company is selling anything as of yet, in a few short months that's likely to change for one of the pair. 

But given that a third rival, Bluebird Bio, is also competing in this market, it's not enough for one to commercialize its candidate faster than the other. It will also need to beat Bluebird to succeed. So, let's analyze each to determine which is the better gene-editing stock in light of the market conditions they're likely to face once their products are out the door, assuming they get there.

Commercialization is nigh

CRISPR Therapeutics is currently closer to commercializing its medicine than Editas, so it has a major edge. Its exa-cel program, which could treat both beta-thalassemia and sickle cell disease (SCD), is done with its phase 3 trials already. The Food and Drug Administration (FDA) will determine in early December whether to approve exa-cel for SCD, and it's expected to decide near the end of the first quarter 2024 for beta-thalassemia.

In other words, the next 12 months will likely see the biotech start to pick up sales revenue for the first time ever. Noteo that it's partnered with Vertex Pharmaceuticals to commercialize exa-cel, so it'll only be eligible to collect 40% of the profits from sales, and it'll only be responsible for 40% of the costs.

CRISPR's treatment is expected to be curative or near-curative for both conditions, and it is intended to be administered only one time. Management thinks that exa-cel could be used to treat 25,000 patients with SCD and 7,000 with beta-thalassemia right out of the gate. It also claims that with some additional research and development (R&D) work and some more discussions with regulators, it might be possible to treat as many as 150,000 SCD patients and 16,000 beta-thalassemia patients in the medium term after the initial approvals.

Bluebird's lovo-cel gene therapy for SCD will go before the FDA in late December, and its therapy for beta-thalassemia, called Zynteglo, is on the market as of August 2022. It also claims that its treatments are near-cures intended for one-time treatment. But it assumes that it can only treat as many as 1,500 beta-thalassemia patients and 20,000 patients with SCD.

So, getting to the beta-thalassemia market first with Zynteglo probably won't stop CRISPR Therapeutics from finding patients to treat. And while it might be an impediment to CRISPR dominating the SCD market, there's still a margin of patients that it can't access. That leaves it strongly positioned to be the better gene-editing stock compared to Editas, but let's elaborate on why that's the case by learning a bit more.

Editas faces a challenging marathon

Whereas for CRISPR Therapeutics the prospect of competing with Bluebird is close to becoming real, for Editas it's an academic concern at the moment. 

Its only clinical-stage program, EDIT-301, is designed to treat (can you guess?) beta-thalassemia and SCD. Its candidate appears to be near-curative in terms of its effects, at least for SCD. But EDIT-301 is only in phase 1/2 clinical trials, and it isn't expected to finish before August 2025. It'll still need to do a phase 3 trial after that, and it could take another couple of years or so before it gets its shot at approval and commercialization.

And then, years from now, assuming it gets approved, which is no sure bet, it'll need to compete for the leftovers of CRISPR Therapeutics and Bluebird Bio, as patients treated or cured with the medicines made by those companies won't be in need of further treatment. 

Furthermore, compared to CRISPR Therapeutics, its balance sheet might struggle to keep the company afloat between now and then. It has $432 million in cash and short-term investments, and $235 million in trailing-12-month operating expenses. It'll need to take out a lot of debt or issue more stock to get EDIT-301 finished. In contrast, CRISPR currently has enough cash and investments for three years of its operating costs and a powerful collaboration partner ready to step in if there's a shortfall. 

Editas' road to commercialization looks very long and foreboding right now, whereas the other biotech's path looks like a quick Sunday drive down the block at this point. Therefore, CRISPR Therapeutics would be the much better gene editing stock to buy today.