Is CRISPR Therapeutics Stock Going to $0, or Will the Hype Pay Off?

CRISPR Therapeutics (CRSP 2.42%) already has notable achievements under its belt. For instance, it developed Casgevy, a medicine for a pair of rare blood diseases, which became the first gene-editing therapy to use the famous, Nobel Prize-winning CRISPR gene-editing system to earn approval.

CRISPR Therapeutics has lagged the market since that breakthrough, but with some highly promising gene-editing medicines in its pipeline and potential upcoming catalysts, some investors are excited about the biotech’s future. Can CRISPR Therapeutics live up to the hype, or will it be a wealth destroyer from here on out?

Image source: Getty Images.

Several breakthroughs in the making

CRISPR Therapeutics’ gene-editing approach could revolutionize standards of care in areas with high unmet needs. That’s one of the best reasons to consider the stock. The company’s pipeline includes several promising medicines for which we should see progress over the next 12 to 18 months. If the data is positive, CRISPR Therapeutics’ shares will jump.

Consider the company’s zugo-cel, a potential treatment for a range of cancers and autoimmune diseases. It belongs to a group of medicines known as CAR-T therapies, which are engineered from healthy T-cells. The problem is, many are made from patients’ own cells, which severely limits their manufacturing capacity. They also come with potential drawbacks and side effects, including immune rejection.

Zugo-cel is being developed to bypass these issues. It is made from healthy donor cells (not the patients’), which makes manufacturing easier, while it aims to reduce the risk of immune rejection (and other problems) through the gene-editing approach.

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NASDAQ: CRSP

CRISPR Therapeutics

Today’s Change

(-2.42%) $-1.32

Current Price

$53.32

Key Data Points

Market Cap

$5.2B

Day’s Range

$53.00 - $55.00

52wk Range

$30.04 - $78.48

Volume

24K

Avg Vol

1.8M

Gross Margin

-653467.24%

Zugo-cel has received the Regenerative Medicine Advanced Therapy designation from the U.S. Food and Drug Administration (FDA), which aims to help speed the development and approval of certain types of treatments (including gene-editing therapies) that have shown promising early clinical evidence for serious diseases with high unmet needs. CRISPR Therapeutics’ pipeline also includes CTX310, a treatment that could advance how we help patients lower bad cholesterol, and SRSD107, a promising next-gen anticoagulant.

Beware of the risks

CRISPR Therapeutics’ platform looks very promising, but the company’s performance will depend on whether it can execute its clinical programs while limiting setbacks. If CRISPR Therapeutics’ leading candidates flunk in clinical trials, the company’s shares will soar. So, although the hype isn’t unjustified – the biotech’s candidates could change the way we treat several conditions – there is also plenty of risk.

My view is that even if some current candidates fail, others will succeed. And CRISPR Therapeutics is more likely to get acquired than to go to $0. So, investors comfortable with a healthy dose of volatility should consider the stock.