All eyes have been on CRISPR Therapeutics (CRSP 0.34%) in recent times because the biotech company has reached a key moment. CRISPR Therapeutics and partner Vertex Pharmaceuticals are awaiting regulatory decisions on exa-cel, their candidate to treat blood disorders sickle cell disease and beta thalassemia.
And this past week, they scored a first big win. The U.K. authorized exa-cel -- to be called Casgevy -- for both indications. This makes it the world's first authorization for a gene editing treatment using CRISPR technology. U.S. and European regulators still are reviewing the candidate, and the U.S. is set to issue a decision for sickle cell next month and a decision for beta thalassemia in March.
So, CRISPR Therapeutics may be getting started along the path to blockbuster revenue. In the trading session following the U.K. news, the stock rose more than 5%. And right now, you may be wondering if investing a significant sum, for example $10,000, in this innovator will make you a millionaire. Millionaires are rarely created overnight, and generally many investments pave the way, but from time to time a standout company could set you off on the right path... Let's take a closer look at CRISPR Therapeutics and see whether it may be one of these potential winners.
Image source: Getty Images.
Fixing faulty genes
First, let's take a look at what the company may accomplish in the coming years. CRISPR Therapeutics specializes in the fixing of faulty genes responsible for disease. It uses a technique known as "CRISPR" -- short for "Clustered Regularly Interspaced Short Palindromic Repeats" of genetic information -- to edit the genome. This involves cutting DNA at a particular location and allowing a repair process to take over.
This process means CRISPR-based treatments actually could serve as functional cures for serious diseases -- a game-changer for patients and a potential revenue machine for CRISPR Therapeutics.
Exa-cel is expected to reach blockbuster status, with revenue of $1.7 billion by 2028, according to Evaluate Pharma.
CRISPR Therapeutics is working on another candidate in late-stage trials, so we could imagine a second product reaching commercialization in the coming years too. Immuno-oncology candidate CTX-110 is involved in a phase 2 trial that could support a regulatory request.
The biotech also may generate revenue by licensing out its powerful technology to others. For example, it signed a licensing deal with Vertex earlier this year so that Vertex could use the gene editing platform in its type 1 diabetes program. That agreement included an upfront payment of $100 million plus future milestone and royalty opportunities.
And, of course, the company is investigating other candidates in earlier-stage studies. So, any exa-cel authorizations or approvals could be just the beginning of the biotech's growth story.
When will exa-cel generate revenue?
As for this first authorization, you may be wondering when exa-cel/Casgevy will start generating revenue. Vertex says it's working closely with health authorities to bring the treatment to patients as soon as possible.
It's important to note that the therapy involves a preparatory conditioning phase, the extraction of a patient's own blood stem cells, the editing of those cells, and then the return of those cells -- through infusion -- back to the patient. This takes months, meaning treatment uptake will be slower than that of a simple pill. And all of this means it will take a while for revenue to grow too.
But even if revenue doesn't soar overnight, it's clear CRISPR Therapeutics is on the right path -- and if all continues to go well during regulatory reviews and in clinical trials, the company could see earnings and its share price take off over time. Today, the stock is trading significantly lower than its peak of more than $200 a share a couple of years ago -- when we had less visibility on future earnings.
Is CRISPR Therapeutics a millionaire-maker?
Now, let's do some math and try to figure out whether CRISPR Therapeutics could make you a millionaire. If you invest $10,000 in the stock today, you could buy about 166 shares. Let's imagine the stock returns to its peak of about $200. Your investment would triple to more than $33,000, and that's fantastic. But it's not in the millions.
So, with a $10,000 investment today, it's unlikely CRISPR Therapeutics will make you a millionaire. But here's the good news: It could help you become a millionaire.
As I mentioned earlier, it's pretty rare for one single stock to create a fortune, but it is much more common for a basket of carefully chosen stocks to create wealth. Ideally, over time you should aim to build up a portfolio of more than 25 stocks, diversified and adapted to your comfort with risk, and hold on for a decade or more.
And that means, today, it's a great idea to add CRISPR Therapeutics to your portfolio -- it just might help you reach your goal of becoming a millionaire if you hang on to it and other promising stocks over the long term.
