For investors interested in gene editing, Crispr Therapeutics (NASDAQ:CRSP) stock is a must-watch. The company’s gene-editing platform promises to deliver therapies across sickle cell disorders, cancer and diabetes, among other diseases.
Yet while CRSP stock does possess massive potential, there are lots of reasons to believe it may never achieve its lofty goals. CRSP stock represents the same promises and pitfalls that biotech stocks always do.
Massive Potential
The potential there is obviously massive. If Crispr Therapeutics can commercialize therapies that can treat those perils to mankind, its shares will skyrocket.
A recent report by Grand View Research suggests that the total addressable market will reach $7.4 billion by 2028. That same report pegs the compound annual growth rate at 21.7% between 2021 and 2028. The company is the biggest name in the space and all indications are that if gene editing lives up to its billing, CRSP stock will soar.
For investors looking for a primer on the entire gene editing landscape, this guide by Luke Lango is a great place to start.
Where Will CRSP Stock Achieve Commercialization?
This is a big question which every investor wants to know. The answer is that the company has yet to achieve commercialization with any of its therapies. But based on Crispr Therapeutics’ current pipeline, it looks likely that the answer will be either hemoglobinopathies or cancer.
Hemoglobinopathies include sickle cell disease and beta thalassemia and disrupt the production of red blood cells.
The company is in the clinical trials stage for both hemoglobinopathy and cancer therapeutics. Development in other therapeutic areas is less advanced. Thus, initial commercialization is likely in the aforementioned therapeutics areas.
And recent news from the company only strengthens that notion. According to a recent press release, news remains promising: “new data on 22 patients, with follow-up of at least 3 months, and ranging from 4 months to 26 months, treated with the investigational CRISPR/Cas9-based gene-editing therapy, CTX001, that show a consistent and sustained response to treatment.”
But while the news is positive, the same problem persists for CRSP stock: Questions of profits and what to expect from shares remain unresolved.
When we take a look at the company’s most recent 10-Q there’s nothing that screams invest now.
Fundamentally Unchanged
The company lost $69.73 million in the first quarter of 2020. That number increased to over $113.16 million a year later. While that might seem like a big deal, it isn’t. Biotechnology companies across the board tend to produce big losses since the timelines and investments therein are large.
It’s all about that grand slam, Biotechs are not .300 hitters, to borrow a reference from baseball. It is swinging for the fences. So as long as the company continues to do what it has, expect losses. There are also a slew of other competitors developing therapeutics. Any of them could leapfrog ahead and perhaps commercialize a therapy first. Intellia Therapeutics (NASDAQ:NTLA) and Editas Medicine (NASDAQ:EDIT) are seeking to commercialize similar therapies and could win in that effort.
But back to Crispr Therapeutics. More importantly, the company increased its cash position in the last year. At the end of the first quarter it held $1.142 billion, up from $894.75 million a year prior. That difference too is mostly irrelevant. As long as the company has a bunch of cash to fund its ambitions CRSP stock prices will remain quite high.
Crispr Therapeutics is about as predictable as companies come in one regard. The company has posted EPS numbers that are steady for the last four quarters. Analysts know what to expect from it and it delivers. The result is that hope rolls on but nothing phenomenal occurs.
That’s what investors can expect for now. Someday it might pop, but we’re left hoping for now.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
