If you're looking to add some growth to your portfolio, a great way to do it is by picking up shares of a biotech company with a recently approved product. Such a treatment will represent a brand new revenue driver for the company -- and sometimes, even its first one -- so if the product takes off, the share price may follow. In many cases, this marks the very start of the biotech's growth story, allowing you to get in early and benefit over time.
This is the case for Iovance Biotherapeutics (IOVA 3.35%) and CRISPR Therapeutics (CRSP 1.35%) today. Each of these biotech players recently won approval for its first product -- and these aren't only regulatory victories, but also votes of confidence in the game-changing technologies they have developed. These stocks both represent interesting growth opportunities today. But if you could only choose one to add to your portfolio, which would be the better buy?
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The case for Iovance
Iovance recently won accelerated approval for Amtagvi, generically known as lifileucel, a treatment for advanced melanoma -- the most dangerous form of skin cancer. The biotech company has developed an exciting technology that harnesses the power of the patient's own immune system to attack their cancer. To produce Amtagvi, doctors collect tumor-infiltrating lymphocytes (TILs) -- in simple terms, cells that fight cancer -- from the specific patient's tumor. These are then sent to Iovance, which uses them to grow billions more of those same effective cancer-fighting cells, which are then infused back into the patient.
The Amtagvi nod represents the first Food and Drug Administration approval for a one-time, personalized T-cell therapy for a solid tumor cancer. More than 30 authorized treatment centers now are ready to begin delivering it, and Iovance's manufacturing capacity can accommodate several thousand patients annually. The company also has many TIL candidates and TIL combinations with other treatments involved in clinical trials, including a trial in non-small cell lung cancer that may support a regulatory request.
This year, Iovance should start to collect some revenue from its first TIL product, and this may be just the beginning.
The case for CRISPR Therapeutics
CRISPR Therapeutics specializes in gene-editing therapies based on CRISPR technology. Certain diseases are caused by mutations in a single section of people's genetic code. CRISPR technology uses a natural cellular process to cut a patient's DNA at highly specific locations and insert a new sequence that corrects the faulty mutation that's causing their disease.
Late last year, CRISPR Therapeutics won the world's first-ever regulatory approval for a product based on CRISPR technology -- Casgevy, a treatment for the blood disorders sickle cell disease and beta-thalassemia.
The exciting thing about Casgevy and the company's other CRISPR candidates is they represent one-time treatments that (if effective) act as functional cures. This clearly could drive patients to give them a try, especially in diseases with limited treatment options -- like sickle cell disease and beta-thalassemia.
As for what's ahead, CRISPR Therapeutics has immuno-oncology candidates involved in clinical trials, and aims to launch its first trial in the area of autoimmune diseases in the first half with a candidate to treat systemic lupus erythematosus.
So, like Iovance, CRISPR Therapeutics should start to deliver product revenue this year, and we also should expect clinical trial progress from its pipeline candidates.
Iovance or CRISPR Therapeutics?
Choosing between Iovance and CRISPR Therapeutics is tough because both of these companies are launching their first products and advancing their pipelines. And each of these stocks has momentum: Iovance has soared by a triple-digit percentage over the past year, and CRISPR Therapeutics is up by close to 50%. But one looks financially stronger, making it the better buy right now.
CRISPR Therapeutics has a cash position of more than $2.1 billion and has reported some quarters of profitability thanks to collaboration revenue. Iovance has a cash level of about $485 million, up from December thanks to a follow-on round of equity financing. Management expects this and its potential revenue to fund operations through the second half of next year. As for earnings, Iovance's losses have deepened over time.
This wouldn't drive me away from Iovance, because I do think the company could have a bright future. But if I had to choose between these two stocks right now, I would go for CRISPR Therapeutics because it not only offers solid earnings growth prospects, it also has the financial strength to keep its pipeline momentum going.
