CRISPR Therapeutics (CRSP 1.71%) and Viking Therapeutics (VKTX 1.49%) are among the hottest mid-cap biotechs on the market. Both have delivered incredible progress in recent months, be it on the clinical or regulatory front. These relatively small drugmakers look highly promising thanks to their incredible, innovative potential.
That's why investors keep bidding up their shares -- although Viking has been the better performer of the two, by a mile, over the past year. So which one of these two stocks will outperform the other over the long run? Let's find out.
The case for CRISPR Therapeutics
CRISPR Therapeutics is a gene-editing specialist. Though this field boasts incredible promise since it can unlock therapies for diseases that have largely eluded researchers, progress has been relatively slow. CRISPR hit a significant milestone last year, when it earned U.S. approval for Casgevy, a treatment for two rare blood disorders developed with Vertex Pharmaceuticals (NASDAQ: VRTX). The backing of a larger biotech was important.
It probably helped Casgevy reach the market faster and in more places than it otherwise would have. Casgevy is also approved in the U.K., the European Union, and Bahrain. The medicine costs $2.2 million in the U.S., with a patient population of 35,000 people in the various countries where it has earned approval. In other words, there is an opportunity worth billions here for Casgevy and its co-marketers, CRISPR Therapeutics and Vertex Pharmaceuticals.
It might take some time before sales for the treatment start ramping up, since gene-editing treatments are complex to administer. But CRISPR should generate steady revenue from Casgevy for many years. The biotech should also make plenty of pipeline progress. One of its candidates in phase 1 studies, CTX211, is being investigated as a potential therapy for type 1 diabetes. CRISPR Therapeutics has four other programs in clinical trials.
Given the biotech's innovative potential and the product it already has on the market, the future looks bright for this stock.
The case for Viking Therapeutics
Viking Therapeutics focuses on developing therapies for metabolic and endocrine disorders. It recently made a lot of noise when it announced positive phase 2 results for VK2735, a potential anti-obesity therapy. The data showed that patients experienced meaningful and statistically significant weight loss at all doses of VK2735, administered subcutaneously, compared to a placebo.
The anti-obesity market is on an unstoppable path forward, and with these results, Viking Therapeutics could become a major player in this promising field despite being a relatively small clinical-stage biotech. That's why the market rewarded Viking Therapeutics. More recently, the drugmaker announced positive phase 1 results for an oral version of VK2735.
Viking Therapeutics has another candidate in phase 2 studies called VK2809, a potential therapy for non-alcoholic steatohepatitis (NASH). It plans to release results from this ongoing trial during the first half of the year. More positive results should send the stock price soaring, considering that NASH is another exciting area. With VK2735 and VK2809 leading the way, Viking Therapeutics could deliver excellent clinical and regulatory progress in the years to come and offer outsize returns to its shareholders.
Which is the better buy?
Viking Therapeutics is a highly promising biotech stock, but perhaps the company's anticipated success is already factoring too much into its stock price. A lot could still go wrong for the company, but it sports a market capitalization of $8.3 billion. CRISPR Therapeutics' is at $5.1 billion, or more than $3 billion less, even though the gene-editing expert already has an incredibly important product on the market and several exciting candidates.
For this reason, I'd recommend investing in CRISPR Therapeutics over Viking Therapeutics today. However, the latter may be a good option for aggressive investors looking to profit from rapidly growing therapeutic areas.
