On November 21, shares rose CRISPR therapeutics (NASDAQ: CRSB) Prices fell by 47% from their peak in March. This may be a bit surprising to people who follow this developer of gene therapies. After all, it’s been less than a year since U.S. and European Union regulators approved its first drug, Casgevy, to treat two blood-related disorders.
Casgevy’s initial launch wasn’t as exciting as investors and its partner, Vertex Pharmaceuticals (NASDAQ:VRTX)he hoped. However, less than a year after launch, it’s still too early to turn our backs on this innovative drugmaker. In addition to Kasgeevi, there are five other treatment candidates in clinical phase tests.
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The Food and Drug Administration (FDA) approved Casgevy to treat sickle cell disease (SCD) last December. In January, the agency followed up by approving transfusion-dependent beta-thalassemia (TDT).
Across the Atlantic, European regulators approved Casgevy to treat both SCD and TDT in February. Despite regulatory approvals, the launch is proceeding slower than investors expected.
CRISPR Therapeutics has wisely partnered with Vertex Pharmaceuticals to develop and commercialize Casgevy, but Vertex is having difficulty getting it off the ground. Despite receiving approval in late 2023, Vertex did not record its first sale of Casgevy until the third quarter.
Sales have been slow because it is a complex treatment produced in single batches of a patient’s stem cells. Once reinjected, the CRISPR-edited stem cells should produce functional hemoglobin, so SCD and TDT patients no longer need regular blood transfusions. Unfortunately, reimplanted Kasgeevi cells can only gain a foothold if patients first deplete their immune systems with a serious conditioning regimen.
Recently, a patient with SCD died during his gene therapy trial Beam treatments. The doctors conducting the study did not blame the BIM candidate for the volunteer’s death; They blamed an air conditioning system containing busulfan. Busulfan is also used for the condition of patients with Casgevy.
The lack of treatment options may be to Kasjevi’s advantage. Last year, the European Medicines Agency revoked the conditional approval of a drug to treat sickle cell disease Novartis It was called Adakveo, after it failed to outperform placebo in a confirmatory trial. In September, Pfizer Oxbryta, a daily pill approved to treat patients with SCD, has been withdrawn from the market after it failed a post-marketing study.
At the end of September, Vertex Pharmaceuticals and CRISPR Therapeutics injected just one patient with Casgevy, but more are on the way. As of mid-October, accredited treatment centers have already collected stem cells from 40 patients. With a list price of $2.2 million, access to small segments of the SCD and TDT combinations could push annual sales to over $1 billion.
Five candidates in clinical-stage testing mean Casgevy probably won’t be the last FDA-approved treatment to come out of CRISPR Therapeutics’ pipeline. At the next meeting of the American Society of Hematology in December, the company will present results of a phase 1 trial of CTX112, an experimental blood cancer treatment that could reach the next commercial stage.
We already know that CTX112 shrinks tumors in six out of nine advanced-stage lymphoma patients. Four of them achieved complete remission. These results may be impressive for a group of relatively healthy patients who have just received their first cancer diagnosis, but this group had undergone extensive prior treatment.
With Casgevy’s revenue lacking so far, CRISPR Therapeutics is still losing money. Thanks to its partnership with Vertex, losses can be controlled. It came up short by just $85.9 million during the third quarter.
The company ended September with $1.9 billion in cash. CRISPR Therapeutics’ big pile of cash offers a long runway to increasing Casgevy’s sales. It also gives CTX112 and the rest of the pipeline time to shine before the company needs to raise capital through Diluted Secondary display.
CRISPR Therapeutics is worth $3.9 billion Market value At recent prices, however, the stock is less expensive than it appears on the surface. With a large cash cushion and little debt, her enterprise value is just $2.1 billion at recent prices. That’s not an unreasonable price to pay for a commercial-stage drugmaker that has a few new candidates in clinical trials.
The stock’s valuation isn’t completely unreasonable, but it’s still high enough to make it a very risky investment. If Casgevy’s sales don’t pick up soon, or its clinical-stage pipeline falters, investors buying at recent prices could suffer huge losses. Unless you have a very high risk tolerance, it’s best to keep your distance from CRISPR Therapeutics stock.
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Corey Renoir He has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beam Therapeutics, CRISPR Therapeutics, Pfizer, and Vertex Pharmaceuticals. The Motley Fool has Disclosure policy.
Down 47% Since March, Is CRISPR Therapeutics Stock a Buy on the Dip? Originally published by The Motley Fool