Despite regulatory approvals in the U.S. and Europe for Casgevy, a gene therapy developed by CRISPR Therapeutics in partnership with Vertex Pharmaceuticals, the company's stock has fallen 47% since March. The slow initial launch of Casgevy, indicated for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT), has tempered investor enthusiasm, though the company has other candidates in the pipeline.
Casgevy's Launch Challenges
Casgevy received FDA approval in December for SCD and in January for TDT, followed by European regulatory approval in February for both conditions. However, Vertex Pharmaceuticals, the marketing partner, only recorded its first Casgevy sale in the third quarter. The therapy's complexity, involving single-batch production from a patient's stem cells and a harsh conditioning regimen including busulfan to deplete the patient's immune system, contributes to the slow rollout. A recent patient death in a Beam Therapeutics gene-therapy trial, attributed to the busulfan-containing conditioning regimen, has further highlighted the risks associated with this approach.
Market Dynamics and Alternative Treatments
The limited availability of effective treatments for SCD and TDT could benefit Casgevy. The European Medicines Agency revoked conditional approval for Novartis' Adakveo after it failed to outperform a placebo in trials. Pfizer also pulled Oxbryta, a daily tablet for SCD, from the market after a failed postmarketing study. As of mid-October, treatment centers had collected stem cells from 40 patients for Casgevy infusion. With a list price of $2.2 million, even capturing a small portion of the SCD and TDT market could generate substantial revenue.
Pipeline Potential: CTX112 and Beyond
CRISPR Therapeutics is also developing CTX112, an experimental blood-cancer treatment. Phase 1 trial results, to be presented at the upcoming American Society of Hematology meeting, show promising activity in advanced-stage lymphoma patients. Six out of nine patients experienced tumor shrinkage, with four achieving complete remission, even after heavy pretreatment.
Financial Position and Investment Considerations
CRISPR Therapeutics reported a net loss of $85.9 million in the third quarter but maintains a strong cash position of $1.9 billion, thanks to its partnership with Vertex. This provides financial stability as it ramps up Casgevy sales and advances its pipeline. While the company's market capitalization is $3.9 billion, its enterprise value is $2.1 billion due to its substantial cash reserves. The stock remains a risky investment, contingent on the successful commercialization of Casgevy and the progress of its clinical-stage pipeline.
