3 Best Gene Editing Stocks To Buy

Gene editing stocks rallied after Intellia Therapeutics released positive interim data suggesting, for the first time, the safety and efficacy of in vivo CRISPR editing in humans. The landmark findings saw Intellia’s share price rocket, as too did other CRISPR-related biotech stocks.

We’ll take a look at 3 other companies operating in the gene editing sector, and assess whether they’re worth buying or not on the back of this breakthrough news.

Editas Medicine New Chief Scientific Officer A Win?

Like Intellia, Editas Medicine, Inc. (EDIT) is another gene editing company that utilizes CRISPR technology to develop therapeutics in the fight against a wide range of diseases.

Indeed, one of Editas’s principal selling points is the company’s expansive pipeline of candidate drugs, where it works on creating two kinds of medicines:

• gene edited medicines, which alter genes in vivo i.e. inside the body; and
• gene edited cell medicines, where gene editing happens outside the patient’s body – in vitro – which is then delivered as a medicine as needed.

Editas is still a loss making enterprise, with its losses expanding more than 50% year-on-year to $56.7 million after steep increases in its SG & A and R&D expenses were reported for the last quarter.

The company did however make some modest revenues of $6.5 million from its research and collaboration projects, and its annual revenues of $92 million are still very much higher than many of its closest peers. Importantly, the business has a strong cash position of $723.2 million, which the company believes will fund its operations through to at least 2023.

From a valuation perspective, Editas makes for a tempting buy because of its somewhat depressed price performance over the last year. Given that so many biotech stocks in the space have seen their share prices spike recently – Intellia (NTLA), for instance, is up over 550% the last twelve months – it is likely just a matter of time before Editas follows suit.

Furthermore, the arrival of Dr. Mark S. Shearman as the firm’s new chief scientific officer is another signal that the company is on the right track – and should, in time, leverage his expertise in fields such as neurology, immunology, and ophthalmology to great effect.

Source: Unsplash

Is CRISPR Therapeutics Lofty Valuation Justified?

Cancer is one of the first diseases that comes to mind when discussing pathologies caused by faulty genes, and it’s no surprise that companies such as CRISPR Therapeutics AG (CRSP) are seeking innovative ways to address this problem.

CRSP specializes in developing immunotherapy treatments that use engineered chimeric antigen receptor T cells (CAR-T), and one of its biggest hopes is its CTX110 product which is expected to be a one-treatment-only solution for a blood plasma cancer affecting a patient’s B-cells.

CTX110 is already at the clinical stage of trials, which is good news for CRISPR Therapeutics right now: its revenues are almost zero, and the company is spending $400 million annually in research expenses too.

It has gross profits to the tune of negative $302 million, and yet the market deems its business to be worth a market cap of $12.5 billion. Can the company justify this high valuation?

Well, it all depends on how novel and unique CRSP’s products turn out to be. The firm is certainly a leader in the industry when it comes to working on immuno-oncology treatments, but it’s by no way the only player in the field. In fact, it faces stiff competition from two of the biggest names in the space, notably Gilead (GILD) and Novartis (NVS), who already have approved drugs in manufacture used to treat B-cell-associated blood cancer.

What’s more, it’s not clear whether CRISPR Therapeutics even has an edge is the wider hematological oncology space, since there are literally hundreds of other ongoing clinical trials exploring treatments for myeloma, lymphoma etc. using CAR-T interventions.

Putting a price on a biotech company with little in the way of sales – and which entirely depends on the success of a drug years away from manufacture – is always fraught with danger. CRISPR Therapeutics is no different.

However, investors might overlook the company’s high valuation and focus on the fact that its share price is way off its previous highs, instead seeing this stock as a rare opportunity to get a growing business at a much discounted cost.

Beam Therapeutics: Game-Changing Gene Editing?

Early stage pharmaceutical companies are often seen as the riskiest plays in the biotech industry, offering huge rewards for investors who buy the stock when it’s cheap and unknown, but laden with the uncertainty that comes from knowing that around 90% of all new drugs in development eventually fail. 

This brings us nicely to Beam Therapeutics Inc. (BEAM), a recent IPO that purports to have a game-changing gene editing technology on its hands called Base Editing, which founder David Liu believes will be more effective than CRISPR.

The company is getting ready to make its first Investigational New Drug application for its BEAM-101 candidate, a therapeutic with the potential to treat sickle cell disease.

Beam’s technology appears to be truly revolutionary; it is able to target a point mutation in a strand of DNA, and, using this kind of precision genetic engineering method, able to “repair” gene coding DNA sequences which give rise to certain kinds of diseases.

Although the firm is still very early in its development, it has of late been busy making strategically important acquisitions and bringing in new talent in a bid to prepare the way forward, buying out GuideTx and installing Amy Simon, MD as its new Chief Medical Officer. It has also been raising funds through a private placement to cover its R&D costs, and has cash at hand of $503 million to continue its work. 

Investors will be glad to know that Beam makes up 1.57% of Cathie Wood’s ARK Genomic Revolution ETF (ARKG), and the company is tipped, according to ARK Invest’s Genomics Analyst Alexandra Urman, to play a key role in “addressing large unmet needs” in the precision medicine field over the coming years.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.