Where will CRISPR Therapeutics be in 1 year?

Jhe past year has been a tough one for the gene-editing specialist CRISPR therapeutics (NASDAQ: CRSP). The company lagged the market as economic concerns such as inflation spooked investors. Clinical-stage biotechnologies like CRISPR Therapeutics, which are not always cost-effective, have been particularly hard hit. However, the biotech has a few promising candidates, and it is exploring key catalysts that could lift its stock price by the end of the year. What does the next 12 months hold for CRISPR Therapeutics?

CRSP given by Y-Charts.

This collaboration is about to bear fruit

The lead candidate in the CRISPR Therapeutics pipeline is exa-cel (formerly known as CTX001), a potential gene-editing therapy for two rare blood disorders called transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD). ). CRISPR Therapeutics collaborates with a biotech giant Vertex Pharmaceuticals on these programs. This long-standing partnership seems ready to bear fruit as the two entities announced that they expect regulatory submissions for exa-cel in the treatment of both SCD and TDT in the United States and Europe by the end of the year.

Once CRISPR Therapeutics officially announces these submissions, expect its stock to jump to the news. But there is more. Exa-cel has received various designations from health regulatory authorities in the United States and Europe designed to expedite and facilitate the therapy development and review process. The United States Food and Drug Administration (FDA) has granted exa-cel Advanced Fast Track Therapy and Regenerative Medicine for the treatment of SCD and TDT.

The FDA typically takes six to 10 months to complete a review of a drug application. Expect the exa-cel review process to be on the lower end of this estimate. In other words, by this time next year, exa-cel may already have received the green light from regulators in the United States. Based on the results produced by exa-cel so far, it seems likely that it will gain approval. In a clinical trial, 42 of 44 patients with TDT did not receive a transfusion after treatment with exa-cel. Follow-ups for these patients ranged from 1.2 months to 37.2 months.

The two patients who were not yet transfusion-free experienced a 75% and 89% drop in transfusion volume.

Meanwhile, all 31 SCD patients treated with exa-cel were free of vaso-occlusive crises (VOC, a side effect of the disease that causes acute pain) with follow-up between two months and 32.3 months. These patients experienced an average of 3.9 VOCs per year based on data collected over the two years prior to starting treatment. TDT and SCD are rare diseases, but they cost a small fortune to manage.

A recent study found that patients with SCD with private health insurance spend approximately $1.7 million in medical expenses related to the disease over their lifetime. Despite all this expense, SCD cannot be cured, and neither can TDT, at least not yet. Exa-cel would be a one-time cure that would help reduce the economic burden of SCD and TDT. As such, the price of the drug could be quite high.

These factors make it even more likely that exa-cel will gain approval in the United States and Europe within the next year. This would send shares of CRISPR Therapeutics skyrocketing. The biotech has other candidates in the pipeline, including three potential cancer therapies, CTX110, CTX120 and CTX130. The company expects to release clinical trial updates for these three programs by the end of the year.

Expect more data from CRISPR Therapeutics’ ongoing clinical studies over the next 12 months.

Is CRISPR Therapeutics a buy?

CRISPR Therapeutics’ collaboration with Vertex Pharmaceuticals was a big step forward. The latter has proven his ability to navigate the delicate and highly regulated pharmaceutical industry, a valuable experience that is sometimes lacking in small clinical-stage biotechs. The partnership makes it less likely that exa-cel will encounter unforeseen regulatory headwinds before it hits the market.

Of course, collaboration is not free. Vertex Pharmaceuticals is now leading development and commercialization efforts for the therapy, and the two companies will share the associated benefits and costs, with CRISPR Therapeutics receiving 40% of the benefits and bearing 40% of the costs. Vertex has had to submit various upfront payments to CRISPR Therapeutics in the past for the exa-cel rights it now owns.

These payments allowed CRISPR Therapeutics to invest more money in research and development and advance its other candidates. I plan to exa-cel reach blockbuster status, even with potential competition from other gene-editing therapies. For instance, Bluebird Organic seems to be about to obtain regulatory approval in the United States for beti-cel, a potential TDT treatment (not all TDT patients are eligible for this therapy).

Exa-cel’s approval would help validate CRISPR Therapeutics as the company continues to fight hard-to-treat diseases with its gene-editing technology. I expect the company to register more significant regulatory milestones over the next five years. Naturally, CRISPR Therapeutics could encounter clinical and regulatory headwinds. Even with that caveat, the long-term opportunity for this innovative company looks attractive.

That’s why it looks like a buy, especially after its stock beat over the past year.

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Prosper Junior Bakiny holds positions at Vertex Pharmaceuticals. The Motley Fool holds positions and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool recommends Bluebird Bio. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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