Crispr Therapeutics AG (CRSP) offers a chance to buy into a pipeline of potential therapeutics, that while not yet proven, has shown early success during its clinical trials. While this company does not yet have a product on the market, after listening to Samarth Kulkarni, CEO of Crispr, I feel strongly enough about his leadership and the technology that his company has developed to say that I am very bullish on this stock.
Kulkarni explained that the fundamental bet that the company is making (and any investors are making along with it) is that smart engineered cells can target and selectively kill cancer cells. I believe they are correct. CRSP is creating these smart engineered cells and two other types of smart engineered cells that have the potential to change healthcare as we know it today. These cells could add what Kulkarni estimates is ten years to the average human lifespan.
The first type of engineered cells CRSP has created takes stem cells from a patient, re-engineers them using the CRISPR technology, and then reintroduces them back into the patient’s body to properly produce a protein and cell type. This will (hopefully) be used to treat disorders like Sickle Cell Disease and cystic fibrosis.
The second type of technology the company is creating will produce engineered immune cells that will specifically target cancer cells and kill them (as Kulkarni described in the above quote).
The third would be using CRISPR and stem cells to create off-the-shelf organs, like the pancreas, that can treat types one and two diabetes.
Truthfully, these goals, and the company’s mission in general, sound more like science fiction than something I would typically be bullish about investing in. However, this company has indicated that the technology works, in early data readouts from their studies. CTX-001 has shown during early clinical trials that 17 people treated with the engineered cells have gone on to appear as though the cells have functionally treated the disease. In other words, those 17 people are no longer suffering from the effects of Sickle Cell or Thalassemia (the diseases CTX-001 treats).
The company has also run a Phase One clinical trial to define the toxicity of another therapy (CTX-110). While the study did not specifically measure the efficacy of the treatment, the company has been able to say that all the people who received the therapy have been cancer-free for one year.
Recent Results and Dividend
CRSP’s stock has been trading between $68.02 (the 52-week low set on December 03, 2021) and $220.20 (the 52-week high set on January 14, 2021).
CRSP brought in revenues of $902.4 million over the last twelve months with a net income of $411.0 million. This figure is a bit deceiving in that the company has sold a 10% stake in CTX-001 to its partner, and this revenue is being reported here. CRSP does not currently have a product on the market. Nor has it received regulatory permission to market a product.
The company has reported third-quarter earnings of -$1.67 per share, beating analyst estimates of -$1.75 per share by $0.06.
CRSP does not currently pay a dividend.
The company has a solid set of financial statements, inasmuch as it has enough has on hand to finance its activities for another four years at its current burn rate.
Wall Street’s Take
13 Wall Street analysts currently cover CRSP and have issued 12-month estimates for the price. Of the 13, ten rate the stock as a Buy and three rate it a Hold, with a high forecast stock price of $220.00, and a low of $90.00. The average CRSP price target of $153.70 implies an upside of 127.2%.
TipRanks.com shows that of the 21 bloggers that have blogged about CVS, 85% of them are bullish, while the sector average is approximately 69% bullish.
Conclusion
Based on the strength of CRSP’s early clinical data, pipeline, commitments from partners, and the strength of the company’s management team, I am bullish on this stock. If the company can achieve half of what seems possible according to its early clinical data readouts, this company might change medicine as we know it today. I am excited to see where the company and the stock price go from where it is today.
Disclosure: At the time of publication, Tim O’Rourke did not own any securities discussed in this article.
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