What’s the current situation with CRISPR Therapeutics (CRSP 0.83%)? The company’s stock has been on a downward trend for nearly three years now. Although they’ve achieved significant regulatory approvals since late 2023, the company’s stock hasn’t bounced back: It’s actually fallen 23% so far this year.
The big question is: Can CRISPR Therapeutics turn things around? Recent developments might just hold the key to rekindling the fortunes of this gene-editing pioneer. Let’s dig into what’s been happening and what it means for investors.
Expanded Reach for CRISPR Therapeutics’ Flagship Product
Since November 2023, CRISPR Therapeutics has been busy securing approvals for its gene-editing treatment, Casgevy, in a slew of countries including the U.S., the U.K., the European Union, Saudi Arabia, and Bahrain.
Casgevy, developed in partnership with Vertex Pharmaceuticals, is designed to treat sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT), both of which are rare blood disorders that haven’t had many treatment options. Through innovative gene-editing techniques, researchers have been able to create one-time cures for these conditions – and that’s precisely what Casgevy aims to deliver.
However, there’s a catch. Manufacturing and administering gene-editing drugs like Casgevy aren’t easy, making them pricey. The procedure involves extracting the patient’s cells, treating them to manufacture the medicine, and then reintroducing them into the patient.
Casgevy comes with a hefty price tag of $2.2 million in the U.S. While CRISPR Therapeutics and Vertex see a target market of 35,000 patients across the U.S. and Europe, the cost could put the cure out of reach for many. Insurance can only cover so much.
Fortunately, CRISPR Therapeutics recently received encouraging news from the U.S. government. The Biden administration unveiled a plan to help Medicaid patients afford Casgevy. Medicaid, geared towards individuals with lower income, would make it challenging for many to access Casgevy otherwise. The program plans to tie payments to the outcomes of the therapy and should start rolling out next year.
In the U.S. alone, there are approximately 100,000 people living with SCD, with around 50% to 60% potentially on Medicaid. While not all these individuals will qualify for Casgevy, a substantial number likely will. This initiative is set to significantly broaden access to Casgevy.
Exploring Opportunities Beyond Casgevy
For the first nine months of the year, CRISPR Therapeutics reported around $1.6 million in revenue — a small amount for a company valued at more than $4 billion. Notably, this revenue wasn’t from Casgevy, indicating a slow uptake.
While it may take time for Casgevy to noticeably impact CRISPR Therapeutics’ bottom line, the Biden administration’s plan should help, at least within the U.S.
This expanded coverage might also smooth the path for CRISPR Therapeutics as it seeks approval for other gene-editing treatments in their pipeline. The company is deeply involved in several projects, including experimental cancer therapies and a potential functional cure for type 1 diabetes.
By establishing a network of certified treatment centers for Casgevy and securing backing from third-party payers, CRISPR Therapeutics should find future launches much more straightforward and quicker.
Should You Consider CRISPR Therapeutics Stock?
The potential for Casgevy is significant. Beyond the 35,000 patients estimated in the U.S. and Europe, CRISPR Therapeutics and Vertex see a market of about 23,000 in Saudi Arabia and Bahrain.
Competition exists, particularly from Bluebird Bio in the U.S., offering rival treatments for SCD and TDT. Nevertheless, Vertex and CRISPR boast much deeper financial pockets. Moreover, Bluebird’s Lyfgenia, designed for SCD, carries a $3.1 million price tag in the U.S. and includes a cautionary label about blood cancer risks.
In Europe and the Middle East, CRISPR and Vertex face even less competition, positioning Casgevy as a billion-dollar revenue prospect before potential label expansions are even considered.
Some analysts believe Casgevy’s peak sales could surpass $2.2 billion annually. Per their agreement, CRISPR Therapeutics gets 40% of the profits from Casgevy. This revenue will be crucial in financing the development of other promising CRISPR-based treatments in their pipeline.
The successful development of Casgevy has played a key role in validating CRISPR Therapeutics’ gene-editing platform. Their pioneering strategies promise more robust clinical and regulatory successes in the coming years.
For these reasons, I believe this biotech stock could be a wise investment for those with a long-term focus.
