We, as humankind, have been dreaming about what future technological advancements will bring. One of the most popular ideas was the advancements in healthcare. Movies and books dreamed of a technology that can diagnose and cure any disease. From simple flu to diseases that cannot even be cured today, our ideas were endless. Throughout my life, I believed this idea to be a fictional made-up story; however, recently, I’ve realized that humanity took a giant leap forward in making our imaginations become a reality.
In 2020, scientists Jennifer Doudna and Emmanuelle Charpentier won the Nobel Chemistry Prize. They have been acknowledged for their pioneering technology called CRISPR-Cas9. It is a gene-editing tool that can potentially eliminate diseases, wipe out pathogens, and create more resilient plants. Jennifer and Emmanuelle have created something that can truly change the world for the better, and CRISPR Therapeutics (CRSP) is at the center of this revolution.
The potentials and the vision CRISPR Therapeutics has are truly mind-blowing. However, the company is still at a pre-revenue stage, and because FDA approval submission, not approval, is expected to happen in late 2022, I do not think CRISPR is a buy today. I believe investors should keep an eye on this revolutionary technology, but the risk of investing may be too grand.
CRISPR-Cas9 is a genome editing technology that allows scientists to edit specific parts of a genome by removing and editing parts of a DNA sequence. CRISPR-Cas9 compared to the previous method of genome editing is far more accurate and faster at the fraction of the price. Because the technology is still in a research phase and not available to the public, the exact price and time it will take is unknown. However, in the past, the process cost thousands to millions of dollars while taking weeks to months depending on the specific genome editing. With the CRISPR-Cas9, the cost will be under $100 and take a few days while being more accurate and reliable (the cost and time frame might differ for all problems one is trying to solve).
With the unparalleled accuracy and effectiveness of CRISPR-Cas9, many of the medical challenges plaguing our society today can be solved. One of these is to permanently cure a Sickle Cell Disease, which is an inherited red blood cell disorder. If you are a sickle cell disease patient, a normal round red blood cell will not be created because of a mutation in the DNA causing a sickle shapes blood cells to be created causing unbearable pain, anemia, swelling, potential strokes, lower life expectancy, and more. Further, a patient diagnosed with this disease will have to regularly visit the hospital to receive a blood transfusion to maintain some of their daily lives. Currently, about 100,000 Americans suffer from sickle cell disease, and CRISPR is at the brink of finding the solution.
CRISPR took a stem cell out of the bone marrow of a patient who volunteered to get the treatment. Then, using CRISPR-Cas9, the relevant gene was edited before infusing the modified genes back into the volunteer’s body. Although the process involved chemotherapy, it was successful. Victory Gray, the first volunteer, is healthy and has not visited the hospital in two years. To date, about 45 patients have been treated. A few years ago, sickle cell disease was believed to be incurable, but today, a technological revolution made it possible. I think this example shows that the potential of this technology is as high as the sky.
With CRISPR’s technology, nearly all the once incurable diseases can be treated. Hundreds of thousands or even millions of people can benefit from this technology. Genetic diseases ranging from blood disorders, cancer, ocular disorders, and more can be treated, and beyond cell and gene therapies, genetic modifications can be used in agriculture to create more nutritious and resilient plants. Further, diseases can be identified and diagnosed or even biofuels can be effectively modified and used. The potential of such a groundbreaking technology is nearly endless. What seemed like a fictional story is slowly becoming our reality, and Crisper Therapeutics is at the center of this revolution.
CRISPR Therapeutics has numerous gene-based medicines under its pipeline of development. Of this transformative development, CTX001 is close to being approved. Regulatory submission to treat Sickle Cell Disease and B-Thalassemia is planned for late 2022 because the initial clinical data show strong results. Further, the registration trial for CTX110 is expected to begin in 2022Q1. Overall, although the company is still at the pre-revenue phase, the development progress of multiple medicines is ongoing.
Apart from the risks associated with investing in pre-revenue companies, CRISPR Therapeutics poses another risk. The company’s mission is to treat serious gene-based diseases. This can be translated to extremely long development and clinical trial period with expensive treatment that is only available to the wealthy, which may be problematic for the society and CRISPR’s investors. For example, sickle cell disease treatment is expected to cost about $2 million, so because it will not be available in mass, future revenue opportunities are in question due to a scalability issue.
CRISPR Therapeutics has a market capitalization of about $5.3 billion with about $1 billion dollars in cash, and it is still unknown how profitable CRISPR will be posing risks. Because the company is targeting serious diseases, all of its solutions will require surgery and a prolonged period of time putting margins and scalability into question. On the other hand, the company’s balance sheet is strong enough to support CRISPR’s operations for the coming few years. The company is losing about $50 million per quarter, the financial health of CRISPR is manageable for now. However, this may change if CTX001 is not approved in the next few years.
Gene editing may pose some ethical concerns, but one has to agree that the potential application of this technology is both nearly endless and needed for many people around the world. As one of a leader in this field, CRISPR Therapeutics deserves recognition for the life-saving potential the company brings. However, because the company is in a pre-revenue stage with future scalability and margins in question, I would not buy CRISPR Therapeutics. I would only hope that their technologies are able to help people suffering today.