On Sept. 30, Pfizer announced a deal with the U.S. government that will allow the pharmaceutical leader to avoid President Donald Trump's tariffs for three years in exchange for slashing the prices of certain drugs in the U.S. and investing in local manufacturing efforts. This deal lifted not only Pfizer, but also much of the healthcare sector, especially the company's drugmaking peers, as Wall Street expects more deals along those lines.
CRISPR Therapeutics (CRSP 10.00%) and BioNTech (BNTX 1.26%), two biotech companies, were among the winners. And the good news is that both stocks still have significant upside potential, although for reasons somewhat unrelated to these recent developments. Here is why CRISPR Therapeutics and BioNTech are worth serious consideration from investors.
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1. CRISPR Therapeutics
CRISPR Therapeutics is a gene-editing specialist. The biotech has just one approved medicine on the market, called Casgevy, which it developed in collaboration with Vertex Pharmaceuticals.
Casgevy isn't contributing much to CRISPR's results yet, but the medicine could, eventually, generate a decent amount of sales. CRISPR Therapeutics and its partner estimated about 60,000 patients in the countries where they have launched Casgevy. The therapy treats two rare blood diseases with few competing therapy options, and it costs $2.2 million in the U.S. Casgevy should, eventually, hit blockbuster status.
CRISPR Therapeutics should also see significant clinical progress in the next few years. The company's leading candidates include CTX310 and CTX320. The former is being developed to help control LDL cholesterol and triglycerides, both of which are important risk factors for a range of cardiovascular diseases. CTX310 has already shown promise in reducing TGs and LDL cholesterol in ongoing early-stage studies and could target up to 40 million patients in the U.S. alone.
CTX320 is targeting high levels of Lipoprotein(a), a risk factor for heart attack and strokes. Both medicines could progress through the pipeline in the next year, and as (if) they do, expect CRISPR's shares to jump. Unlike Casgevy, which is an ex vivo gene-editing medicine, CTX310 and CTX320 are of the in vivo variety, meaning they avoid the complex and lengthy procedure of collecting patient cells.
In vivo therapies are much simpler, and if CRISPR Therapeutics ends up launching these two, they could achieve more success than Casgevy. The biotech has several other candidates in the pipeline as well. CRISPR's gene-editing platform looks promising. Although there is some risk involved related to potential clinical and regulatory setbacks, the stock has significant upside potential, provided its leading candidates pan out and Casgevy's commercial progress continues.
2. BioNTech
BioNTech is the company that created Comirnaty, one of the best-selling coronavirus vaccines, which it ultimately partnered with Pfizer to advance through the clinical trial phases.
The pandemic is mostly behind us, and BioNTech's coronavirus-related sales are much lower than they once were, not to mention somewhat volatile and unpredictable. In the second quarter, BioNTech's revenue was 260.8 million euros ($306.1 million), compared to the 128.7 million euros ($151.1 million) reported in the year-ago period.
However, BioNTech has an exciting pipeline and could see significant progress on that front, which would jolt its share price. BioNTech's prospects in oncology appear especially promising. One of the company's leading candidates is called BNT327. This medicine is being touted as a potential Keytruda killer, that is, a medicine that could prove more effective across a broader set of patients than Merck's Keytruda, the world's best-selling therapy.
BNT327 is being tested across lung cancer, breast cancer, liver cancer, and several others. In a phase 1b/2 clinical trial for breast cancer, BNT327 showed competitive overall survival results that appeared even better than those of Keytruda. It's always a challenge to compare across studies, but BNT327 definitely looks promising. The total addressable market could be huge, considering Keytruda alone generates well over $20 billion in annual sales.
And that's just one of BioNTech's late-stage candidates. The company's shares could jump as it proves that it wasn't just a one-hit wonder.
