Using gene therapy, companies can change patients’ DNA. One type of gene therapy, called CRISPR, largely mimics a method used by bacteria to fend off viruses. As a result, they can reverse defects in cells that cause diseases. Companies are constantly improving CRISPR and other gene editing techniques, and one firm is already reportedly close to using the tech to cure a very prevalent disease. With that said, here are three leading gene therapy stocks for investors to consider.
CRISPR Therapeutics (CRSP)
Using the CRISPR technique, CRISPR Therapeutics (NASDAQ:CRSP) has developed a treatment for sickle-cell anemia, a very prevalent disease that affects people with African heritage. Some say that the treatment will cure the disease. As a result, CRSP is certainly one of the top gene therapy stocks.
Sickle cell patients have a “defect” in their hemoglobin proteins that causes their red blood cells to become abnormally shaped. CRISPR’s treatment, which was developed in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX), works by altering patients’ blood stem cells so that they produce normal hemoglobin proteins.
The U.K. has already approved the treatment, and the U.S. FDA is expected to do the same in the near term. The agency’s advisory panel found that the treatment’s benefits far outweighed its risks.
Seeking Alpha columnist Edmund Ingham reports that about 20,000 patients are likely to receive the treatment, which will probably cost about $2 million. CRSP is slated to receive 40% of the revenue from the drug. If we assume that 5,000 patients get the treatment each year, that would equate to revenue of $4 billion annually.
The shares currently have a market capitalization of $5.6 billion, meaning that they are changing hands for about 1.4 times my sales estimate. That’s a very low valuation for the company.
Gilead (GILD)
Gilead (NASDAQ:GILD) owns therapies that have been approved by the FDA, Yescarta and Tecartus. The revenue of the treatments climbed last quarter 23% and 18% year-over-year helping the firm’s overall sales jump 33% YOY.
Oncology treatments accounted for only $769 million of the company’s $7 billion of revenue in Q3. But if Gilead’s revenue from these treatments continue to climb at 30%+ YOY clips, I believe that the firm’s overall top line will soon grow much faster. And, in turn, would probably push GILD stock meaningfully higher. That’s particularly true because the forward price-earnings ratio of GILD stock is a very low 10.8.
On its Q3 earnings call in November, Gilead executives reported that the use of its CAR T therapies were being hampered by the fact that the treatments were primarily available in large hospitals. However, most patients were treated in their local community hospitals. To remedy the latter situation, Gilead is adding more treatment hospitals in large population centers. That strategy could prove to be very successful for GILD.
Caribou Biosciences (CRBU)
Caribou Biosciences (NASDAQ:CRBU) utilizes the CRISPR technique to alter the immune system’s T cells in order to enable them to fight cancer more effectively.
In a Phase 1 study which comprised 16 blood cancer patients patients, all but one of the patients responded positively to the therapy. Moreover, 44% of the patients’ cancer either diminished or disappeared after at least six months of treatment.
Also noteworthy is that Pfizer (NYSE:PFE) showed some confidence in the company’s treatments. The pharma giant bought $25 million of CRBU stock in July.
Finally, eight of the nine Wall Street analysts following the stock have “buy” or “strong buy” ratings on the shares.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
