Is This Stock a Biotech Hidden Gem?

Is This Stock a Biotech Hidden Gem?

Posted On December 1, 2023 10:32 am

Shares of CRISPR Therapeutics AG (CRSP) have gained more than 40% over the past three months against the industry’s decline of nearly 11%. Moreover, the stock has surged more than 80% over the past month.

The gene-editing stock continues to enjoy accelerated momentum from a key regulatory approval. On November 16, CRISPR Therapeutics and its partner, Vertex Pharmaceuticals Incorporated (VRTX), announced that the United Kingdom-based Medicines and Healthcare Products Regulatory Agency (MHRA) granted conditional market authorization for CASGEVY™.

CASGEVY has been authorized for the treatment of patients 12 years of age and older with sickle cell disease (SCD) with recurrent vaso-occlusive crises (VOCs) or transfusion-dependent beta-thalassemia (TDT), for whom a human leukocyte antigen (HLA) matched related hematopoietic stem cell donor is unavailable. There are nearly 2,000 patients eligible for CASGEVY in the United Kingdom.

This represents the first regulatory authorization of a CRISPR-based gene-editing therapy worldwide and offers a new option for eligible patients waiting for innovative therapies. Notably, this approval made CASGEVY the first approved product in CRISPR Therapeutics’ portfolio.

Further, CRSP and VRTX’s Biologics License Applications (BLAs) seeking approval for exa-cel for treating SCD and TDT indications are currently under review in the U.S.

The U.S. Food and Drug Administration (FDA) granted priority review to the BLA filing for exa-cel in SCD, and the exa-cel filing in TDT indication was accepted for a standard review. A final decision on the BLAs for exa-cel in SCD and TDT indications is anticipated by December 8, 2023 and March 30, 2024, respectively.

In October, an FDA Cellular, Tissue, and Gene Therapies Advisory Committee appeared satisfied with CRISPR/Vertex’s regulatory filing on exa-cel in the SCD indication. This development will likely move the gene therapy closer to gaining potential marketing approval from the agency.

Both the SCD and TDT have significant unmet medical needs. A potential approval for exa-cel in the U.S. will be a major boost for CRSP and will likely drive the stock higher in the upcoming quarters.

Meanwhile, the company is developing CRISPR candidates to create next-generation CAR-T cell therapies for treating hematological and solid-tumor cancers. Clinical trials are ongoing for its CAR-T product candidates, CTX110 and CTX 112, targeting CD10 in B-cell malignancies.

In addition, CRSP is evaluating the safety and efficacy of CTX130 in two ongoing phase I studies for treating various solid tumors like renal cell carcinoma and certain T-cell and hematologic malignancies. VCTX211, an allogeneic, gene-edited, stem cell-derived product candidate for treating Type 1 Diabetes, has been undergoing clinical trial.

A clinical trial has also been initiated for CTX310, targeting angiopoietin-related protein 3 (ANGPTL3).

Let’s discuss several factors that could impact CRSP’s performance in the near term:

Deteriorating Financials

For the third quarter that ended September 30, 2023, CRSP reported nil total revenue, missed the analysts’ estimate of $7.96 million. That compared to revenue of $94 thousand in the same quarter of 2022. The company’s loss from operations came in at $132.41 million. Also…

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