CRISPR Therapeutics’ Pipeline Continues to Make Progress

CRISPR Therapeutics CRSP posted fourth-quarter results in line with our expectations, and its pipeline candidates are continuing to progress in development. We maintain our fair value estimate of $119 per share and view the stock as very undervalued, currently trading in 5-star territory. As a clinical-stage biotech company, CRISPR Therapeutics provides long-term investors who possess a high degree of risk tolerance with pure play exposure to novel gene editing technology to treat severe, genetic diseases.

We continue to have a positive outlook for CRISPR’s gene-editing candidate, exa-cel, which is being developed in partnership with Vertex Pharmaceuticals for two blood diseases: transfusion-dependent beta thalassemia and sickle cell disease. Exa-cel’s regulatory submissions were validated in the European Union and United Kingdom in December 2022, and the companies expect to complete submission in the United States by the end of the first quarter.

Vertex and CRISPR have presented promising phase 3 data for exa-cel demonstrating that the drug has the potential to be a durable, one-time functional cure. Due to the high unmet medical needs for patients with these blood diseases, we forecast that exa-cel could hold strong pricing power and become a blockbuster opportunity, if approved. We like that two additional phase 3 studies have been initiated to evaluate exa-cel in pediatric patients, which could broaden the addressable patient population.

As an emerging biotech company with no marketed drugs, CRISPR does not possess an economic moat. We think the company has the funding and technological capabilities to potentially bring several of its pipeline programs to market. However, we see a very high level of uncertainty related to regulatory approvals for the company’s early-stage portfolio and a range of potential outcomes. We believe CRISPR merits a positive moat trend due to its developing pipeline, which we view as possessing strengthening intangible assets.