Since 2014, Cathie Wood has been the shepherd of the ARK Invest family of exchange-traded funds (ETFs). These thematic funds aim to invest in disruptive technologies, like flying cars, genomic medicines, and streaming content.

While the disruptive technology thesis sounds enticing, the reality is that most of these companies are cash-flow-negative research and development projects, resulting in high levels of volatility and, more often than not, underwhelming performance. Wood's ARK Genomic Revolution ETF (ARKG -3.56%), for instance, has badly underperformed the passively managed Vanguard Health Care Index Fund since its inception.

VHT Total Return Level Chart

VHT Total Return Level data by YCharts.

Still, some of Wood's top picks do hold tremendous potential. The gene therapy trailblazer Verve Therapeutics (VERV -7.84%), which Wood holds in both her flagship ARK Innovation ETF and ARK Genomic Revolution ETF, is a prime example.

Although this biotech is presently down by roughly 3.3% for the year at the time of this writing, its shares have rocketed higher by nearly 60% over the first two trading sessions this week. Here's why this next-generation biotechnology stock may be worth adding to your portfolio right now.

A clock with hands that read time to buy.

Image source: Getty Images.

A breakdown of Verve's investing thesis

Founded in 2018, Verve Therapeutics employs a next-generation form of gene therapy known as base editing. Base editing enables highly precise gene modifications without making a double-stranded break in the DNA molecule. The company in-licensed the groundbreaking tech from base-editing pioneer Beam Therapeutics.

The biotech's lead candidate is VERVE-101, a base-edited therapy indicated for the rare cholesterol disorder heterozygous familial hypercholesterolemia (HeFH). VERVE-101 is presently in an early-stage trial designed to evaluate its safety and preliminary efficacy in patients with HeFH. Interim data from the trial are slated to be released at the American Heart Association Scientific Sessions on Nov. 12.

The big deal is that HeFH is forecast to grow into a nearly $60 billion market by 2033. As a one-time functional cure for the disorder, Verve's lead candidate could become the standard of care in this high-value setting. That said, the biotech also has plans to trial another base-edited HeFH therapy, dubbed VERVE-102, in the first half of 2024. VERVE-102 sports a unique delivery system that might lead to better patient outcomes than its predecessor.

While a large, underserved market and a novel mechanism of action are always intriguing, Verve's stock really stands out as a table-pounding buy due to its expanded collaboration with Eli Lilly (LLY -0.51%). On Oct. 27, Lilly purchased Beam Therapeutic's opt-in rights to Verve's cardiovascular disease candidates, along with a third undisclosed target.

The key reason this deal is noteworthy is that it comes just days before Verve is scheduled to release VERVE-101's first batch of data to the world. That's a strong indicator that the data will indeed be impressive. Lilly, after all, has a superb track record of identifying promising early-stage candidates and subsequently bringing them to market in a timely fashion.

What's the bottom line?

As of this writing, Verve has a market cap of under $1.2 billion. That pales in comparison to the commercial opportunity inherent in a potential functional cure for HeFH. Moreover, Lilly has one of the hottest hands in the industry when it comes to developing drugs for underserved conditions. So, while nothing is ever guaranteed in the high-risk world of biopharma, this Cathie Wood biotech stock screens as a table-pounding buy for investors with an elevated tolerance for risk.