Despite regulatory approvals for Casgevy, a CRISPR-edited therapy co-developed with Vertex Pharmaceuticals, CRISPR Therapeutics (NASDAQ: CRSP) faces market challenges as its stock has fallen 47% since March. The slow initial launch of Casgevy, approved for sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT), has contributed to investor concerns.
Casgevy's Market Entry and Challenges
Casgevy received FDA approval in December for SCD and in January for TDT, followed by European regulatory approval in February. However, Vertex Pharmaceuticals, the partner responsible for commercializing Casgevy, reported its first sale only in the third quarter. The therapy's complexity, requiring single-batch production from a patient's stem cells and a conditioning regimen involving busulfan to deplete the patient's immune system, has slowed adoption. A recent patient death in a Beam Therapeutics gene-therapy trial, attributed to a busulfan-containing conditioning regimen, has further highlighted the risks associated with the treatment process.
Competitive Landscape and Market Potential
Despite the challenges, the limited treatment options for SCD and TDT could favor Casgevy. The European Medicines Agency revoked conditional approval for Novartis' Adakveo, and Pfizer pulled Oxbryta from the market after it failed a postmarketing study. As of mid-October, authorized treatment centers had collected stem cells from 40 patients, with the potential to drive annual sales above $1 billion, given Casgevy's list price of $2.2 million.
Pipeline Development and Financial Status
CRISPR Therapeutics is also advancing CTX112, an experimental blood-cancer treatment, with Phase 1 trial results to be presented at the American Society of Hematology meeting in December. Early data indicates that CTX112 shrank tumors in six out of nine advanced-stage lymphoma patients, with four achieving complete remission. The company reported a manageable loss of $85.9 million in the third quarter, supported by its partnership with Vertex, and holds $1.9 billion in cash, providing a financial runway for ramping up Casgevy sales and advancing its pipeline.
Analyst Perspectives and Investment Strategies
ARK Investment Management, led by Cathie Wood, has increased its stake in CRISPR Therapeutics, viewing gene editing as a valuable long-term investment. Wood believes that curing a disease is more valuable than traditional medications, despite the perception that it is a one-time treatment. Jefferies analyst Maury Raycroft noted positive indicators in getting patients into the treatment funnel, projecting that most of the approximately 40 patients will be treated within 1-2 quarters. William Blair analysts also view the treatment of the first commercial Casgevy patient as a milestone, anticipating significant revenue generation in 2025.
