CRISPR Therapeutics (CRSP +4.60%), a mid-cap biotech company, achieved a major milestone when it earned approval for the first CRISPR-based medicine in 2023. However, the company has significantly underperformed broader equities in the past five years. The stock is bouncing back, though, and it has had momentum over the trailing-12-month period. Things could get even better as CRISPR Therapeutics makes clinical progress throughout the year. With plenty of catalysts ahead, is now a good time to buy the stock?
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Multiple data readouts on the horizon
CRISPR Therapeutics is a gene editing specialist. The company's only approved product, Casgevy -- which it commercializes in partnership with Vertex Pharmaceuticals -- has not yet generated much revenue. But CRISPR Therapeutics has a rich pipeline of exciting candidates across several therapeutic areas. Some of the company's products in development could be breakthroughs in their respective niches, just like Casgevy was in treating sickle cell disease and transfusion-dependent beta-thalassemia.
CRISPR Therapeutics' key candidates include CTX611, a potential anticoagulant. The company plans to release topline data from a phase 2 study for this medicine in the second half of the year. Here's why positive results could send the stock price soaring. CRISPR Therapeutics is looking to address the drawbacks of current anticoagulants, including side effects such as bleeding and the need to take them daily -- sometimes twice a day -- depending on the drug. The daily administration may not be the worst thing in the world.
However, CTX611 is a long-acting option that could be administered once every six months; that's way more convenient. This could disrupt the large anticoagulant market valued at about $20 billion per year, according to the company. CRISPR Therapeutics' ongoing mid-stage trial for this candidate targets patients undergoing total knee arthroplasty who are prescribed anticoagulants to help prevent venous thromboembolism (blood clots that form in veins). About 800,000 such procedures occur in the U.S. annually, underscoring CTX611's potential, especially given that it will target many other indications if approved.
NASDAQ: CRSP
Key Data Points
Another one of CRISPR Therapeutics' promising candidates is zugo-cel. This therapy is being developed to treat several forms of cancer and autoimmune conditions. It could be another important product for CRISPR Therapeutics. It is currently undergoing several phase 1 studies for which CRISPR Therapeutics plans to release data later this year. Then there is the biotech's CTX310, an investigational therapy that aims to lower LDL cholesterol and triglycerides (TGs) in at-risk patients, particularly those with high levels of either (or both) due to several conditions.
This could be yet another transformative medicine that would be a one-and-done option for patients, most of whom otherwise need to take medicines regularly to avoid the high risk of cardiovascular events that come with high levels of LDL and TGs. CRISPR Therapeutics plans to release data for an ongoing phase 1 clinical trial for CTX310 in the second half of the year. Once again, positive results could send the stock soaring.
High-risk, high-reward play
This will be an important year for CRISPR Therapeutics. If the company can deliver positive results across the board, its share price will maintain the momentum we have seen over the last 12 months. It could be just the beginning, too. If all goes well, CRISPR Therapeutics will launch phase 3 studies within the next few years and might have a very different -- and much more diversified -- portfolio of approved medicines by the early 2030s.
That's the best-case scenario. The reality is that CRISPR Therapeutics' shares carry significantly above-average risk -- as do most biotech companies of this size -- considering its stock price might crater if it fails to impress the market with its updates. Investors should keep that in mind before hitting the "buy" button. Those who are risk-tolerant might want to consider initiating a small position in the stock.
