CRISPR Therapeutics Stock Falls 34% in a Year: Time to Buy or Sell?

Shares of CRISPR Therapeutics CRSP have lost more than 30% in the past year. Though the stock soared at the onset of 2024, thanks to the FDA approval of its one-shot gene therapy Casgevy for two blood disorders, much of these gains have pared mainly due to the waning interest of investors in CRSP.Despite securing the first product approval in Casgevy, the company is yet to record revenues from its sales. Also, a lack of pipeline updates beyond Casgevy’s approval is not sitting well with the investors.Another reason behind the dip is the poor performance of the overall drug and biotech sector in the past couple of months after Trump picked Robert F. Kennedy Jr., a vaccine skeptic, as the next secretary of the Department of Health and Human Services, the agency that oversees the FDA. This, along with disappointing third-quarter sales and profits, guidance cuts and pipeline setbacks, affected the overall performance of the drug and biotech industry.The decline in CRSP’s share price and the drug/biotech sector’s downturn have left investors confused about whether to buy, hold, or sell the stock. Let’s delve into the company’s strengths and weaknesses to gain a better understanding of how to play the stock amid this price decline.Approval for First CRISPR-Based Therapy: A Milestone for CRSP StockThe approval for Casgevy is a breakthrough for medical science, as it is the first approval for a CRISPR-based gene-editing therapy in the world. Developed in collaboration with Vertex Pharmaceuticals VRTX, Casgevy was approved in late 2023/early 2024 for two indications —sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT) — in the United States and Europe.Both SCD and TDT indications have a significant unmet medical need. With Casgevy’s approval, CRISPR Therapeutics offers a new treatment option to an estimated 35,000 patients living with severe SCD or TDT across the United States and Europe, with additional patients in Bahrain and Saudi Arabia. The therapy has demonstrated the potential to alleviate blood transfusion requirements for TDT patients as well as reduce painful and debilitating sickle crises for SCD patients.If successfully commercialized, the therapy can reap enormous profits for the company. Vertex has already mentioned that it is experiencing a strong launch for Casgevy. We expect the company to start recording collaboration revenues from the therapy’s sales in the fourth quarter of 2024.CRISPR Therapeutics and Vertex Pharmaceuticals are also conducting separate late-stage studies to expand Casgevy’s label in pediatric patients with SCD and TDT.CRSP Boasts Encouraging CRISPR-Based Pipeline ProgramsCRISPR Therapeutics is pursuing the development of CRISPR candidates to create novel CAR-T cell therapies. Management is developing two next-generation CAR-T therapy candidates — CTX112 (targeting CD19-positive B-cell malignancies) and CTX131 (targeting relapsed or refractory solid tumors) — in separate phase I/II studies. Both these next-generation candidates have demonstrated significantly higher CAR T cell expansion, functional persistence, and manufacturing robustness than the recently discontinued first-generation candidates in clinical studies.Following the success with ex-vivo therapy Casgevy, management is focusing on in vivo candidates. Unlike ex-vivo therapies, where cells are removed, modified and then inserted back into one’s body, in vivo therapies involve infusing new genes directly into the body.CRSP is currently evaluating two in-vivo candidates, namely CTX310 (targeting ANGPTL3) and CTX320 (targeting lipoprotein(a) [Lp(a)]), in separate early-stage studies. These are directed toward validated therapeutic targets associated with cardiovascular disease. Management intends to further expand this in-vivo pipeline with two new in-vivo programs before 2025-end.Stiff Competition for CRSP’s Targeted MarketsSome other companies are also using CRISPR technology to address various ailments. One such company is Beam Therapeutics BEAM, which is pursuing an ex vivo, autologous transplant-based approach for SCD and TDT indications. BEAM is developing its lead pipeline candidate BEAM-101 in SCD indication in the phase I/II BEACON study. Beam Therapeutics is also advancing its engineered stem cell antibody paired evasion (ESCAPE) conditioning strategy to face the toxicity challenges of autologous transplant in SCD and beta-thalassemia patients.With regard to in-vivo therapies, the company is currently lagging Intellia Therapeutics NTLA, which is one of the few companies with in-vivo CRISPR-based candidates in clinical-stage development. Intellia is developing multiple in-vivo CRISPR-based therapies in early to late-stage studies to address different indications like ATTR amyloidosis and hereditary angioedema.CRSP Stock’s Performance, Valuation & EstimatesShares of CRISPR Therapeutics have lost nearly 34% in the past year compared with the industry’s 14% decline, as seen in the chart below. Shares of the company are also currently trading below its 50-day and 200-day moving averages. The stock has also underperformed the sector and the S&P 500 index.CRSP Stock Underperforms Industry, Sector & S&P 500 Image Source: Zacks Investment ResearchFrom a valuation standpoint, CRISPR Therapeutics is trading at a discount to the industry. Going by the price-to-book value (P/B) ratio, the company’s shares currently trade at 1.77, lower than 3.42 for the industry. Image Source: Zacks Investment ResearchEstimates for CRISPR’s 2025 loss per share have improved from $5.23 to $5.19 in the past 60 days. Image Source: Zacks Investment ResearchHow to Play CRSP Stock?While CRISPR’s pipeline is still in early-stage development, we believe that with Casgevy’s approval, the company has now crossed its biggest hurdle — the lack of a stable revenue stream.Although CRSP is yet to record revenues from Casgevy, we remind investors that treatment with Casgevy is an arduous and time-consuming process. It requires the fulfillment of a lot of conditions, including stem-cell collection, their subsequent modification and then patient infusion.The next major catalyst for CRSP will be its fourth-quarter results, with the company recording Casgevy sales for the first time. This will give us an insight into the demand and market potential for Casgevy. Until now, we have only been getting updates on the therapy’s launch progress, which so far seems rapid, thanks to Vertex’s efforts.CRSP’s strong cash balance of $1.9 billion (as of September 2024-end) should also assure investors that management can smoothly carry out its day-to-day operations, including late-stage development of its pipeline.We would suggest holding on to this Zacks Rank #3 (Hold) stock for now, considering the company’s growth prospects. 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Click to get this free report Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report Beam Therapeutics Inc. (BEAM): Free Stock Analysis Report Intellia Therapeutics, Inc. (NTLA): Free Stock Analysis Report CRISPR Therapeutics AG (CRSP): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks