CRISPR Therapeutics (CRSP +0.44%) soared a few years ago, climbing more than 200% from the start of 2020 through early 2021, on optimism about the potential approval of its first gene editing therapy. That candidate eventually won the regulatory nod and is commercialized as Casgevy, a gene editing treatment for blood disorders.
But the biotech stock has spent recent years declining, and though it's rebounded somewhat this year, it still is down more than 60% from its 2021 peak. Meanwhile, Casgevy hasn't yet brought in significant revenue for the company. Is CRISPR Therapeutics yesterday's news?
Image source: Getty Images.
A first product approval
First, let's talk a bit about this company's technology and why it generated so much excitement prior to the first product approval. CRISPR Therapeutics' name clearly reflects its business. The company uses a process called CRISPR gene editing throughout its pipeline, and it involves cutting DNA at a specific location so that a natural repair process may unfold. Casgevy was the first CRISPR-based product ever approved.
The technology may be game-changing as it represents a functional cure for the illnesses it treats. Since it "fixes" the underlying problem, one treatment could result in a patient remaining symptom-free over time.
NASDAQ: CRSP
Key Data Points
CRISPR Therapeutics and partner Vertex Pharmaceuticals won approval for Casgevy for sickle cell disease in late 2023 and for beta thalassemia in early 2024. The product hasn't yet delivered major revenue since it's much more complex than launching a pill, for example. The companies had to establish authorized treatment centers, and then the treatment of each patient requires a number of months -- the process involves cell collection, gene editing, and then the return of the edited cells to the patient.
Sharing profit with Vertex
Vertex recently said the product may deliver more than $100 million in revenue in the 2025 full year. But it's important to keep in mind that Vertex retains 60% of Casgevy profit while CRISPR Therapeutics keeps 40%. This means that it may take some time for CRISPR Therapeutics to generate a noteworthy level of profit from the product.
Meanwhile, CRISPR Therapeutics' pipeline is full of other candidates based on this technology -- and that means that if and when they're approved, they too may take time to deliver revenue growth and profit.
This idea may have weighed on stock performance in recent times, and another element might have also become a headwind: A few years ago, the investment community bet on the company reaching the product approval milestone, and it did -- now, though, with a milestone achieved and revenue taking time to grow, some may consider the biotech yesterday's news. For these reasons, though it's still a promising player, it may not be the best bet for cautious investors right now.
