Strong Outlook for CRISPR Therapeutics’ Gene Editing Technology, $119 FVE, Shares Undervalued

Business Strategy & Outlook:

CRISPR Therapeutics is a gene editing company focused on the development of CRISPR/Cas9-based therapeutics. The company’s proprietary platform specializes in Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/Cas9, which precisely cuts DNA to disrupt, delete, correct, and insert genes to treat genetically defined diseases. CRISPR’s emerging technology has led to a new class of therapies, which are well suited for targeting rare diseases or other disorders that are caused by genetic mutations. CRISPR/Cas9 works by having CRISPR (pieces of DNA sequences) guide Cas9 (an enzyme that can cut and edit DNA) to edit, alter, or repair genes. It is believed the company’s proprietary technology has the potential to build blockbusters in rare diseases with limited treatment options available. CRISPR Therapeutics currently has no approved drugs and a largely early-stage pipeline, so awarding the company an economic moat is refrained. CRISPR Therapeutics is focused on developing and commercializing novel therapies to treat severe, genetic diseases and currently possesses a sizable, yet mostly early-stage pipeline. Its lead candidate, CTX001, is being developed in collaboration with narrow-moat Vertex Pharmaceuticals for the treatment of transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD). CRISPR Therapeutics and Vertex plan to file for regulatory approval by the end of 2022. The rest of CRISPR Therapeutics’ pipeline is either in early (Phase 1) or pre-clinical stages of development. While CRISPR Therapeutics does not currently have approved products, the company provides long-term investors with pure play exposure to gene editing

Risk and Uncertainty:

There is significant uncertainty related to regulatory approvals for the company’s early-stage pipeline candidates and a range of potential outcomes. Product governance is an ESG risk for CRISPR Therapeutics, as failure to adhere to extensive regulations can lead to expensive recalls, increased regulatory scrutiny, and lawsuits from affected customers. Additionally, lawsuits related to patent rights and potential patent infringements are another risk. It is anticipated gene editing companies like CRISPR Therapeutics will operate under cross licensing agreements with the Broad Institute as many of the gene editing technology platforms are interrelated. Access to basic services is another ESG risk the company will face if its drugs receive approval since its sales will depend on reimbursements from third-party payers, such as Medicaid or Medicare, private insurers, and national healthcare systems. Attempts by governments to contain healthcare costs could result in pricing pressure and lead to reduced profit margins.

Bulls Say:

Partnerships allow CRISPR Therapeutics to receive milestones and economic benefits from drug candidate progression while offsetting some of the clinical development costs.
CRISPR Therapeutics’ CRISPR/Cas9 platform has the potential to develop highly efficacious and potentially curative treatments for rare, genetic diseases with high unmet needs, which will likely lead to pricing power.
It is viewed the company’s pipeline as possessing strengthening intangible assets and assign it a positive moat trend

Company Description:

CRISPR Therapeutics is a gene editing company focused on the development of CRISPR/Cas9-based therapeutics. CRISPR/Cas9 stands for Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR-associated protein 9 (Cas9), which is a revolutionary technology for precisely altering specific sequences of genomic DNA. The company is focused on using this technology to treat genetically defined diseases. CRISPR’s most advanced pipeline candidate, CTX001, is in collaboration with Vertex Pharmaceuticals and targets sickle cell disease and transfusion-dependent beta-thalassemia, which have high unmet medical needs. The company is progressing additional gene editing programs for immuno-oncology, as well as a stem cell-derived therapy for the treatment of Type 1 diabetes.

(Source: Morningstar)

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