CRISPR Therapeutics (CRSP) has experienced a 47% stock decline since March, despite the recent approvals of its gene therapy, Casgevy, for treating sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT) in both the U.S. and Europe. The slow initial launch of Casgevy, developed in partnership with Vertex Pharmaceuticals, is a key factor contributing to investor concerns.
Challenges in Casgevy Rollout
While regulatory approvals were granted in late 2023 and early 2024, Vertex Pharmaceuticals 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 challenging conditioning regimen, has hindered rapid adoption. This regimen, necessary for the reinfused CRISPR-altered stem cells to take hold, involves depleting the patient's immune system, posing significant risks.
A recent patient death in a Beam Therapeutics gene-therapy trial, attributed to a conditioning regimen containing busulfan (also used in Casgevy treatment), has further amplified concerns about the safety of these procedures.
Market Dynamics and Alternative Treatments
The limited availability of effective treatments for SCD and TDT could still benefit Casgevy. The European Medicines Agency revoked conditional approval for Novartis' Adakveo after it failed a confirmatory trial, and Pfizer pulled Oxbryta from the market following a failed postmarketing study. As of mid-October, authorized treatment centers had collected stem cells from 40 patients, with just one patient infused with Casgevy by the end of September. The $2.2 million price tag could drive annual sales above $1 billion if even a small fraction of the SCD and TDT populations are reached.
Pipeline Potential: CTX112
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
Despite ongoing losses, CRISPR Therapeutics maintains a strong financial position, with $1.9 billion in cash as of September, thanks to its partnership with Vertex. This provides a substantial runway to ramp up Casgevy sales and advance its pipeline. The company's market capitalization is $3.9 billion, but its enterprise value is $2.1 billion, reflecting its significant cash reserves.
However, analysts caution that the stock remains a high-risk investment. Failure to accelerate Casgevy sales or setbacks in the clinical pipeline could lead to significant losses for investors. A high risk tolerance is recommended for those considering investing in CRISPR Therapeutics.
