CRISPR Therapeutics (CRSP 1.50%) soared 54% last year as growth stocks rallied and the company itself moved toward an important milestone: the approval of its very first product. The gene editing specialist won the world's first nod for a CRISPR-based gene editing therapy back in November when the U.K. authorized Casgevy for sickle cell disease and beta thalassemia. Then the U.S. went on to approve the product for both blood disorders too.
What this means is CRISPR Therapeutics this year should start reporting its first product revenue. So, we're actually right at the start of the biotech's growth story -- a story that should deepen as the company advances other candidates through its pipeline. Meanwhile, the overall market has reached into bull territory, and this generally supports growth stocks. So, is CRISPR Therapeutics a buy in the new bull market? Let's find out.
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Fixing faulty genes
First a bit of background on this innovative company. CRISPR Therapeutics specializes in gene editing, or the fixing of faulty genes responsible for certain diseases, and uses a technique called "CRISPR," which is short for "Clustered Regularly Interspaced Short Palindromic Repeats." The CRISPR method involves the cutting of DNA at a specific location to allow a natural repair process to take over.
CRISPR Therapeutics uses this technique throughout its pipeline, so the recent regulatory approval of its first product is a very big deal. We can see it as a vote of confidence in the technology, showing regulators are willing to offer potential CRISPR gene editing products the nod as long as clinical data are strong.
Now, the approval of Casgevy also opens up the door to potential revenue, useful to help the company fund candidates in development. CRISPR Therapeutics shares Casgevy profit with partner Vertex Pharmaceuticals, taking 40%. Vertex takes the lion's share at 60%, but Vertex also is responsible for 60% of program costs -- and this company, which currently sells a handful of other therapies, offers its experience in building out infrastructure, manufacturing, and product launches. So, this partnership represents a very good deal for CRISPR Therapeutics.
Casgevy may become a blockbuster
Product sales may take some time to grow because of the monthslong Casgevy treatment process, but over time, analysts expect Casgevy to reach blockbuster status. This is possible because of the limited treatment options right now for these blood disorders and the potential for Casgevy to serve as a functional cure. Those two facts could encourage doctors and patients to give this new treatment a try.
And Casgevy may be just the start for CRISPR Therapeutics. The company recently put its focus on two next-generation immuno-oncology candidates, CTX-112 and CTX-131, that offer stronger efficacy and manufacturing profiles than the first-generation candidates. CRISPR Therapeutics is studying these particular candidates in clinical trials and aims to provide an update on the studies this year. The company also is expanding into auto-immune diseases and aims to launch a clinical trial of CTX-112 in systemic lupus erythematosus in the first half of this year.
Thanks to these clinical programs, the company expects a "catalyst-rich 12 to 18 months."
NASDAQ: CRSP
Key Data Points
Is the stock a buy?
Now, let's get back to our question. Is CRISPR Therapeutics a buy in the new bull market? As I mentioned, the company is in the early days of its growth story, with product sales as early as this year and potentially positive clinical data reports to power share price increases. Of course, any negative trial news could weigh on the stock, but this is a standard risk investors face with any biotech company.
As for price, CRISPR Therapeutics' shares jumped last year, but they're trading well below a peak reached a couple of years ago -- when we had a lot less visibility on the future of Casgevy and other candidates were earlier stage than they are today.
Both of these points make me optimistic about CRISPR Therapeutics' share price path ahead. On top of this, as mentioned above, bull markets and times of economic recovery or expansion tend to favor growth stocks. This scores another point for CRISPR Therapeutics in my book.
All of this means that this top gene editing stock has plenty of room to run even after last year's performance. And it makes a great stock to buy in the new bull market.
