CRISPR Therapeutics’ CRSP shares have lost 6.6% in the past two weeks compared with the industry’s 8.4% decline, as seen in the chart below. The stock has underperformed the sector and the S&P 500 index. Shares of the company are also currently trading below its 50-day and 200-day moving averages.
CRSP Stock Performance
Image Source: Zacks Investment Research
The drop in the share price is likely due to the decline of the drug/biotech sector in the past couple of months due to lower-than-expected third-quarter results, guidance cuts and pipeline setbacks. Last week, President-elect Donald Trump announced his decision to nominate vaccine skeptic Robert F. Kennedy Jr. to run the Department of Health and Human Services. This news also hurt the sector, particularly the vaccine stocks.
Let’s delve into the company’s strengths and weaknesses to gain a better understanding of how to play the stock amid this price surge.
Approval for First CRISPR-Based Therapy: A Boon for CRSP Stock
CRISPR and partner Vertex Pharmaceuticals’ VRTX one-shot ex-vivo gene therapy, Casgevy, was approved in late 2023/early 2024 for two blood disorders — sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT) — in the United States and Europe. VRTX leads the global development and commercialization of Casgevy under the terms of the 2021 agreement, with support from CRSP.
This approval was a breakthrough for medical science, as it was the first for a CRISPR-based gene-editing therapy. Both SCD and TDT indications have a significant unmet medical need. Casgevy has the potential to alleviate blood transfusion requirements for TDT patients and reduce painful and debilitating sickle crises for SCD patients. Per management, the therapy offers a new treatment option to nearly 35,000 patients living with severe SCD or TDT across the United States and Europe, with additional patients in Bahrain and Saudi Arabia.
Per management, more than 45 authorized treatment centers (ATCs) have been activated globally since mid-October. On itsearnings call VRTX mentioned that Casgevy has seen a strong launch.
CRISPR Therapeutics is yet to record collaboration revenues from Vertex for Casgevy sales.
CRSP’s Immuno-Oncology & Autoimmune Programs Picking Up Pace
CRISPR Therapeutics is pursuing the development of CRISPR candidates to create novel CAR-T cell therapies. Management is developing two next-generation CAR-T therapy candidates — CTX112 (targeting CD19-positive B-cell malignancies) and CTX131 (targeting relapsed or refractory solid tumors) — in separate phase I/II studies. Both these next-generation candidates have demonstrated significantly higher CAR T cell expansion, functional persistence and increased manufacturing robustness compared to the recently discontinued first-generation candidates. Preliminary data from the CTX131 study is expected before this year’s end.
Management is also exploring the potential of these next-generation candidates in other indications. In August 2024, management announced that it has started two new clinical studies — one evaluating CTX131 for hematological malignancies (including T-cell lymphomas) and another on CTX112 in systemic lupus erythematosus (SLE) indication. It also intends to assess CTX112 in other autoimmune indications.
Stiff Competition for CRSP’s Targeted Markets
Some companies are also using CRISPR technology to address various ailments. One such company is Editas Medicine EDIT, which is developing its lead pipeline candidate renizgamglogene autogedtemcel (reni-cel). This candidate employs CRISPR gene editing to treat SCD and TDT indications. Editas’s reni-cel is being evaluated in a late-stage study for SCD and an early-stage study for TDT.
Another company, Beam Therapeutics BEAM, is also developing the one-shot gene therapy BEAM-101 for SCD and TDT indications in early to mid-stage studies. A prospective approval for either of these gene therapies is likely to induce acute competition for CRSP.
CRSP Stock Valuation & Estimates
From a valuation standpoint, CRISPR Therapeutics is trading at a discount to the industry. Going by the price-to-book value (P/B) ratio, the company’s shares currently trade at 2.06, lower than 3.46 for the industry.
Image Source: Zacks Investment Research
Estimates for CRISPR’s 2024 loss per share have improved from $5.58 to $5.20 in the past 60 days. Over the same timeframe, loss per share estimates for 2025 have widened from $4.98 to $5.31.
Image Source: Zacks Investment Research
How to Play CRSP Stock?
Though we acknowledge that CRISPR’s pipeline is still in early-stage development, having a marketed product like Casgevy will likely assure investors that the company could now generate a stable stream of revenues. The stock is also currently trading at a discount to the industry. Year to date, shares of the company have lost 25%, likely due to a lack of pipeline updates this year. Such a dip in the share price could be seen as a buying opportunity for long-term investors.
For those who already own this Zacks Rank #3 (Hold) company, the next major catalyst will be an update from the early-stage study on CTX131 in solid tumors, which is expected before the end of this year. This will likely provide insight into the candidate’s efficacy and safety profile.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Free: See Our Top Stock And 4 Runners UpVertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
Beam Therapeutics Inc. (BEAM) : Free Stock Analysis Report
Editas Medicine, Inc. (EDIT) : Free Stock Analysis Report
CRISPR Therapeutics AG (CRSP) : Free Stock Analysis Report
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