3 TOP GENE-EDITING STOCKS | CRSP, NTLA, EDIT |
I’ve been investing in gene-editing stocks for years now and I’ve had to hold for long periods of time whilst I waited for the action to really begin! Finally last year, up steps Cathie wood famous for her bullish calls on Tesla and says that she thinks gene-editing will be the biggest growth industry of the decade and of couse off they went…
However, despite a lot of good news for the sector, the broader market has undergone a huge rotation out of red hot growth stocks and into value names which has caused a lot of volatility amongst speculative stocks including almost all within the gene-editing space.
This volatility often causes the market to become out of sync as many stocks get unfairly brought down with the rest of the market and this creates great opportunities for us as investors.
I’ve done a lot of research into the gene-editing sector and these are the 3 leaders within the industry! I’m not one for surprises so I’m just going to say that I expect number 3 on this list to at least 10X... Could even 20X!
1) CRISPR THERAPEUTICS (CRSP)
First up is CRISPR Therapeutics (CRSP)! This has been the biggest and most valuable company in the industry for a number of years now thanks to their partnership with pharmaceutical giant Vertex. This partnership has given them a financial advantage over key rivals Editas & Intellia which has allowed them to invest and hire the best talent as well as fund & rapidly advance their clinical trials in a bid to beat their peers to market.
This is extremely important because whoever gets to the market first will be able to negotiate multi year partnerships with enterprise clients giving them a huge foothold in the space!
Right now, the companies’ most advanced treatment is CTX001 which is aimed at treating sickle cell disease but the company is in foot race with rival Editas Medicine. However CRSP now has double the amount of researchers and scientists than Editas thanks to the investment from Vertex and therefore it’s looking likely that they’ll get to market first and potentially take a much larger portion of the pie.
Not only does it look like CRSP will get to market first but their partnership with pharma giant Vertex will also help the business manufacture and commercialise their treatments giving them another significant advantage! If that wasn’t enough, unlike some of their peers, Crispr Therapeutics is performing global trials rather than just say in the US or Europe so when they do get the green light on one of their treatments they’ll have multiple market to go after.
Crispr Therapeutics is focusing 50% of it’s research towards oncology treatments and 50% on rare diseases – such as Sickle Cell & Beta Thelasemia. The company is getting close to a major breakthrough with the latter but their oncology programmes are still 2 or 3 years away from advanced trials. That said, if CTX001 does prove to be successful in treating rare diseases then their oncology programmes CTX120 & CTX130 as treatments for cancer and more specifically solid tumours will begin to look extremely exciting!
From a valuation perspective, the stock of CRSP is looking pretty enticing after falling almost 50% as part of the growth stock sell-off. Along with a recent rally for industry peer Intellia, CRSP is no longer the largest gene-editing stock by market cap despite having the strongest financials & pipeline in the space and therefore I do think the stock is quite well valued given it’s competitive advantages & leadership position.
2) INTELLIA THERAPEUTICS (NTLA)
This was the first gene-editing stock that I ever invested in back in 2017 and I had to wait very patiently for 3 years as the stock traded sideways until the whole industry took off in 2020 following positive coverage from the likes of Cathie Woods at Ark Invest!
Despite a very good year, NTLA was lagging peers like CRSP & Editas Medicine due to slower sales growth, a lack of funding and a string of high profile departures amongst it’s management team.
However, the reason I invested in NTLA back in 2017 and not their competitors was because the company was founded and being run by a lady called Jennifer Doudna who co-discovered the Crispr technology that this industry is currently being built on. When Doudna won the noble prize for her discovery 8 months ago, the stock of Intellia took off like a rocket and has now climbed over 600% in a year whilst other companies like CRSP & Editas have climbed around 40%.
The recent outperformance for NTLA stock is not just the Doudna effect but they also reported revolutionary data in June from a phase 1 trial where they successfully edited DNA within the liver. This is a landmark proof of concept for NTLA’s technology and it’s made the stock a more enticing investment for those who need some assurance before investing in such a highly speculative space.
Right now Intellia’s attractive to investors because it perhaps carries less risk than others that have yet to produce such positive data, and they clearly have a unique advantage over the field given their ties to Jennifer Doudna. Being part owned by such an industry pioneer and a famous nobel prize winner will do NTLA favours in terms of their branding or perhaps as they seek funding and partnerships, however they are now the most richly valued company in the space by market cap despite having lower sales and a weaker pipeline of trials versus their peers!
This is a tricky one to recommend right now and it comes down to how much you value the Doudna effect! Perhaps watch one of her ted talks or even her recent podcast with Neil Degrasse Tyson to get a bit more of a view on her!
3) EDITAS MEDICINE (EDIT)
I think I’ve saved the best for last here, at least from a valuation perspective and possible return on investment! Editas Medicine makes up the last of the 3 leaders in the gene-editing space and despite being valued greater than CRSP back in 2016 and more than Intella for pretty much most of the last 5 years, Editas is now worth about a quarter as much as their rivals despite having pretty much the same technology and a similar pipeline of trials!
Of course, there’s only so much money that people want to invest in highly speculative industries and given that CRSP has that partnership with Vertex and Intellia is riding a tsunami of good news from trials to Nobel prizes, it seems like the money has all gone to 1 side of the ship!
This has been exacerbated further by algorithms and momentum traders that chase those high flying stocks and I think we’re seeing a real unbalanced market right now and over time, although I think the entire industry will lift all boats, I do think that Editas is just 1 bit of good news away from becoming a really good catch up trade.
So Crispr Therapeutics has the money, Intellia has Jennifer Doudna, so what does Editas have other than the fact that it’s cheaper? Despite being valued a lot cheaper than their peers, Editas actually has better revenues than most within the industry but not only that, they recently disclosed much better revenue growth than their peers and because of that, the stock is now 5x cheaper than major rival Intellia on a price to sales ratio which is often the best way to judge how expensive growth stocks are.
We’ve spoken about how Intellia trades at a premium in large due to their recent trial results - However Editas is undergoing trials of their own and given that they’re pretty much using the same technology as Intellia, it’s pretty likely that we’ll see positive data on their 3 upcoming trials, with an update expected next month. So what is Editas working on, well 1 of those trials is called EDIT301 which is a competitor to CRSP’s sickle cell treatment and like Crispr Therapeutics, Editas is also looking to expand those trials to test it on beta thelasaemia.
So that space is highly competitive however the other 2 advanced trials that Editas are working on are super exciting ocular treatments aimed at curing multiple types of blindness. The company also has very early stage trials within their oncology pipeline and despite competition from Crispr Therapeutics this is a space where Editas does have help having signed a collaboration agreement with pharma giant Bristol Myers.
So that’s a bit about Editas but perhaps their X factor or competitive advantage definitely lies in their intellectual property. The company not only holds the most patents in the gene-editing industry but they recently extended their partnerships with the likes of MIT & Harvard which gives Editas exclusive rights to Crispr technologies developed by these 2 schools until 2024!
Similar to Intellia & CRSP, Editas has it’s own advantage so it’s kind of up to you and how you rank the importance between things like strong finances, management team & intellectual property! If this technology is as revolutionary as we hope, then I believe the market will be big enough for all 3 companies so perhaps their biggest threat is actually next-generation gene-editing tools that might prove to be better than CRISPR technology.
However, right now these 3 stocks are currently the leaders within gene-editing and if they move fast enough then they’ll continue to grow quickly and then they can use their financial strength to acquire their competition similar to FB, Visa infact pretty much every large company out there!
I’ve covered 3 gene-editing stocks in this article but I’ve got a lot more information on all 3 and I'll be releasing videos on them soon. To watch these videos, you just have to subscribe to my Youtube channel - CLICK HERE
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Disclaimer: All trading involves risk. Only invest money that you can afford to lose and remember that past performance doesn’t guarantee future results. Everything posted by me is for educational purposes only. I am not a financial advisor and no information on this website or any accounts linked with myself should be considered as financial advice. Remember, all trades are at your own risk.
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