I’ve been investing in a growth stock called CRISPR Therapeutics (NASDAQ:CRSP) for a little over 18 months, and it’s fair to say, it’s been quite a ride. Having been up almost 100%, I’m now back where I started.
The gene-editing pioneer is currently trading for $45 a share, and that’s down from $200 a share in late 2021.
So, is this stock really in bargain basement territory?
A true pioneer
CRISPR therapeutics uses a revolutionary gene-editing technology called (no surprise) CRISPR — clustered regularly interspaced short palindromic repeats — that allows precise modification of DNA to treat genetic diseases.
The process actually takes place naturally in bacteria, and the two scientists who discovered it recently received a Nobel Prize in Chemistry.
It’s a fascinating technology that has two active parts: a guide RNA to target specific genes for disruption, deletion, correction or insertion, and the Cas9 enzyme, which acts as “molecular scissors” to cut the DNA.
A revolution in medicine
Thousands of scientists around the world believe this technology will revolutionise survival rates for various diseases and conditions, several of which have previously been very hard to treat.
And this is demonstrated CRISPR Therapeutics’s first approved therapy, CASGEVY, which treats people suffering from sickle cell disease (SCD) and transfusion-dependent beta-thalassemia.
Before CRISPR, the treatment was typically regular transfusions to replace irregular blood cells with donor ones.
The potential is clearly huge. While CRISPR and its peers have focused on these blood disorders, the technology shows promise for treating a huge range of disease caused by genetic mutations, including cancers.
The value proposition
Most of the analysis I’ve seen concerning the firm has focused on its CASGEVY therapy, which is 60% owned by pharma giant Vertex and is slowly being rolled out in the US. At the last update, which was approximately eight months after regulatory approval was granted, there were 20 enrolled patients.
That might sound like a slow start, but analysts expect this figure to grow substantially over the next couple of years, with more than 100,000 eligible patients globally.
However, there are several things to consider.
Firstly, the treatment costs $2.2m. That’s below the average cost of a lifetime of transfusions, and substantially cheaper than Bluebird Bio‘s therapy that gained approval at the same time and came with a safety notice. Nonetheless, the price tag could result in slower payer approval times.
It’s also the case that CASGEVY puts a lot of pressure on the body. Following cell collection, patients have to wait months for their cells to be edited before undergoing chemotherapy to kill existing stem cells.
The bottom line
Wall Street currently says the stock is undervalued by 64% — that suggests bargain basement territory.
However, I accept that this is one of my more speculative investments because I’m very aware that the technology is still in its early stages, with many unknowns regarding long-term safety and efficacy.
So, why did I invest?
I wanted exposure to this revolutionary technology that will hopefully change lives for the better.
After much research, I decided that CRISPR Therapeutics, with its advanced pipeline and commercialisation prospects, was the best pick.
It currently represents around 3% of my portfolio, reflecting my hopes for the company, but also my acceptance that things don’t always go to plan.
