Crispr Therapeutics: Progress, Risk, And Reward – Seeking Alpha

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In my previous article, I had a hold rating on CRISPR Therapeutics (NASDAQ:CRSP). My reasoning behind the hold rating was the risks involved with investing in CRISPR. The company was and continues to be a pre-revenue company that is completely reliant on the FDA approving the company's method of treating disease. Further, because CRISPR has not even filed for regulatory submission, I believed the risks involved in CRISPR to be too big. At the time, the progress seemed slow with future potentials of the CRISPR Cas-9 barred by years of research regulatory filings. However, my views on the company have slightly changed. The past few months of rapid progress have shown promising results and the potential to make risk to reward chances more attractive along with their valuations. A plan for regulatory filing in late 2022 is on track with immuno-oncology and in-vivo programs making significant progress with an impressive pace of development. Therefore, given continuous rapid progress towards reaching the potential of the CRISPR Cas-9, I believe CRISPR Therapeutics can be a cautious buy.

(If you are unfamiliar with CRISPR Cas-9 technology and its potential, please go back to my previous article.)

Immuno-oncology program is designed to teach our immune system to recognize and protect the body against specific cancer cells.

Since my previous article, significant progress has been made in CTX 110, 120, and 130 programs. Starting with CTX 110 targeting to treat CD19, after the initial dose testing, the company has found evidence of a dose-dependent response resulting in further progress in testing CTX 110 to test for its safety and efficacy during the consolidation dosing trial. The data for the phase 1 test will come out later in 2022. Further, CTX 120 treating relapsed myeloma and CTX 130 treating solid tumors and hematologic malignancies by targeting CD 70 data are expected to be compiled during the first half of 2021.

What I initially believed to be a talk of the distant future has changed. According to the National Institute of Health, the median development time of a single cancer drug was 7.3 years with about $648 million in costs. Some drugs took up to 12 years to develop. These past results and statistics compared to the progress of CRISPR Therapeutics showed the magnitude of their achievements and potential.

CRISPR Therapeutics was founded in 2013, and in December 2017, the company announced its clinical trial application. Then, in 2019, the company started the first clinical tests of CTX 110 with a CTX120 study quickly following in 2020 with CTX130 following later in 2020. Finally, in January 2020, VCTX210 clinical trials started. Thus, since the start of the company's first clinical test, 4 solutions have followed in a span of about four and a half years. Considering that CTX001 will be filed for approval in 2022 with CTX110 to follow in 2024, the pace of innovation and development continues to be outstanding even in comparison to the average cancer drug development speed of already established companies.

CRISPR Therapeutics has announced that the first patient has been dosed in phase 1 clinical trial of VCTX210 for the treatment of type 1 diabetes. The goal of the current clinical trial is to allow the patients to create their own insulin within their bodies. Further, CRISPR Therapeutics has announced that they will be starting and making progress on multiple in-vivo projects simultaneously in the coming 18 to 24 months. I believe this news creates significantly bigger potential considering the accessibility of the in-vivo solutions. Therefore, utilizing ex-vivo approaches as a stepping stone, CRISPR Therapeutics is continuing its fast progress towards a regulatory filing of multiple in-vivo programs in the coming years.

It has become more likely for the company to be on schedule for its CTX-001 regulatory filing in late 2022. Given this timeline, CTX-001 might be in the market in 2023 creating a strong foundation for the company's reputation and future growth. The excitement around the potential after the filing may cause a sudden spike in the company's stock price.

CRISPR Therapeutics currently has a market capitalization of about $4.3 billion as a pre-revenue company. I initially believed this to be expensive. However, considering the current pace of development with an expected CTX001 filing for approval later in 2022 with oncology platforms to follow shortly after, I believe the current market capitalization can be attractive for risk-tolerant investors. Investment in CRISPR Therapeutics at this stage may not be for every investor, but investors who are willing to endure the volatility, potential delays, and chances of failure may find CRISPR attractive.

Once the flywheel starts rolling, CRISPR Therapeutics will likely thrive; however, because the company is still in the clinical phase or pre-revenue phase, the risks in investing in CRISPR Therapeutics are still large. There may be significant delays due to unexpected side effects, or FDA and EMA reviews may be prolonged or delayed because this is such a new technology and needs careful decision-making. Whatever the reason may be, delays will likely be detrimental to the company. Further, it may be years until CRISPR generates consistently growing revenues since the approval may not immediately mean demand for this product. Finally, It is not even relevant to talk about the company's future profitability yet.

However, I believe that given the current valuations and the potential from the ongoing progress, it may be worth a small initial position in the speculative portfolio.

CRISPR Therapeutics is at the center of innovation. Utilizing the CRISPR Cas-9 technology to edit parts of our genome, the company is rewriting the ex-vivo and in-vivo approaches to treating a multitude of diseases that have been considered incurable in the past. To my surprise, the pace of innovation shown through the progress made by CRISPR Therapeutics in the past few months showed the massive potential of the CRISPR technology in relation to the risks it possesses. Therefore, considering the potential of the innovation and the pace of innovation shown through the company's progress, I believe CRISPR Therapeutics is a cautious buy.