Shares of CRISPR Therapeutics (NASDAQ:CRSP) — which specializes in gene-editing innovations — are tumbling on Thursday. The red ink follows an announcement that co-founder, President and Chairman Rodger Novak will step down from the company effective Sept. 15. CRSP stock is down about 4% as of this writing as a result.
According to the accompanying press release, Novak elected to leave CRISPR after “nearly a decade of dedicated service.” On the date of his departure, CEO Samarth Kulkarni will succeed Novak as Chairman while continuing to serve as the head executive. Kulkarni praised the outgoing co-founder, stating in part:
“[Novak] was instrumental in defining the business model of the company in its early days, establishing key collaborations, and shepherding the initial public offering and the early-stage development of exa-cel, our investigational therapy for severe sickle cell disease and transfusion-dependent beta thalassemia currently under regulatory review for commercial use.”
Moving forward, CRISPR will focus on the aforementioned exa-cel therapy. Per Clinical Trials Arena, the U.S. Food and Drug Administration (FDA) granted a priority review of exa-cel for sickle-cell disease (SCD) and “assigned a Prescription Drug User Fee Act (PDUFA) target action date” of Dec. 8, 2023.
CRSP Stock Faces a Challenging Mixed Environment
On the surface, a shake-up at the top levels of influence in CRISPR could be a positive catalyst for CRSP stock. Although a sometimes controversial entity due to some underlying ethical questions about gene editing, the company also offers hope for patients at the same time. Still, despite positive developments, CRIPSR faces a mixed environment.
On the encouraging front, last month, CRISPR announced better-than-expected results for its second quarter of 2023. Notably, the biotech rang up a strong sales beat, with revenue jumping to $70 million from a mere $158,000 in Q2 2022. This was thanks to “collaboration revenue” from Vertex Pharmaceuticals (NASDAQ:VRTX), with which CRISPR partnered for exa-cel.
In Q2 2023, CRISPR also bested bottom-line expectations due to research and development (R&D) expenses declining 17% year-over-year (YOY) to $101.6 million. This helped narrow its net loss per share by 59% YOY to 98 cents.
Still, Baird analyst Jack Allen maintained a “neutral” rating on CRSP stock along with a $46 price target. Essentially, Allen believes that CRSPR “already reflects a clean regulatory path and a strong rollout for exa-cel.” The analyst’s $46 target comes in lower than the current share price as well.
Why It Matters
At the moment, analysts peg CRSP stock as a consensus moderate buy. This assessment breaks down as 10 buy ratings, six holds and one sell. Overall, the average price target for shares lands at $81.50, implying around 67% upside potential. However, the four most recent ratings — two buys, one hold and one sell — reflect some brewing skepticism.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
