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CRISPR Therapeutics (CRSP) just made history on Friday with the first FDA-approved gene-editing medicine based on the Nobel Prize-winning discovery that targets disease with the billion-year old defense mechanism bacteria use to battle viruses.

CRISPR -- which stands for clustered regularly interspaced short palindromic repeats -- was discovered and described as a potential gene modifying treatment in a paper published in 2012 by biochemist Jennifer Doudna and microbiologist Emmanuelle Charpentier.

Their research collaboration, which began in 2011 when the two scientists met at a conference, set them on the trail of an ancient mystery they were both deeply interested in: how did some bacteria defeat invading viruses with such precision and consistency?

It turns out that bacteria could learn to “edit” the DNA of viruses with a built-in “molecular scalpel” and permanently disable their ability to replicate within the host. Doudna and Charpentier found that bacteria were leaving detailed clues about this warfare technology through clustered and repeated sequences of genetic code.

In 2020, they were awarded the Nobel Prize in Chemistry for their discovery of the CRISPR/Cas9 “genetic scissors.” Cas is short for “CRISPR-associated” and used to designate the different enzymes involved with a particular gene.

In a special edition of Zacks Confidential tonight I’ll be doing a deeper dive on the dynamic duo of CRISPR. And I’ll also be discussing at least four other stocks that are the best ways to play the CRISPR revolution. Right now, let’s look at the news and the numbers that sparked an 80%+ rally in CRSP shares in November.

The FDA Approval Landmark

I have been an investor in CRISPR stocks since 2017 when I launched my Healthcare Innovators portfolio service. And to say it's been a bumpy road -- for both the R&D and the stocks -- would be putting it lightly. (That's to say nothing of the legal and patent battles over the science which are sure to come back around.)

Gene editing is scary to many people, and word of rogue experiments in China didn’t help its public reputation for the approval of clinical trials. I recall holding shares of Editas Medicine (EDIT) for round-trips between $20 and $90 -- twice!

I tried to hang on through the ups and the downs, believing the bigger medical breakthroughs and inevitable stock breakout would come (with fingers crossed). Alas, as investors we instead entered a long "CRISPR winter."

The great news is that the dedicated R&D work of scientists and medical professionals stayed warm and fruitful during these years. And thankfully I was buying both EDIT and CRSP near their lows in 2023.

CRISPR Therapeutics Gets the First Green Light

CRSP is currently a Zacks #2 Rank Buy as EPS estimates have climbed over 30% in the past two months because over a dozen covering analysts raised the consensus loss for this year from -$4.83 to -$3.27.

I now expect estimates for next year to also rise significantly after this historic approval, and push the stock into the upper deck of the Zacks Rank.

So what made the FDA launch this landmark leap for gene-editing and bring such a controversial science to the medical marketplace?

First, on October 31, an FDA Advisory Committee panel met to discuss the risks and benefits of the investigational treatment "exa-cel" (exagamglogene autotemcel) from CRISPR Therapeutics (CRSP) and its "big brother" partner Vertex Pharmaceuticals ((VRTX Quick QuoteVRTX - Free Report) ).

Exa-cel was designed and tested in clinical trials to treat two debilitating blood disorders, Sickle Cell Disease (SCD) and transfusion-dependent beta thalassemia.

The FDA challenge: One of the unique hurdles for CRISPR technologies is the potential for "off-target" edits of other genes that could be turned off, replaced, altered or eliminated. And this was one of the primary themes of the meeting of the Cellular, Tissue, and Gene Therapies AdCom.

The FDA opportunity: An FDA green light would make exa-cel the first approved drug using CRISPR and could offer a permanent solution for patients with severe SCD, a genetic disorder where red blood cells morph into a collapsed “sickle” shape that makes it difficult for them to travel in the bloodstream.

From the NIH website on Sickle Cell Disease...

SCD is a group of inherited red blood cell disorders that affect hemoglobin, the protein that carries oxygen through the body. Normally, red blood cells are disc-shaped and flexible enough to move easily through the blood vessels. In sickle cell disease, red blood cells become crescent- or “sickle”-shaped due to a genetic mutation. These sickled red blood cells do not bend or move easily and can block blood flow to the rest of the body.

Bottom line on FDA AdCom: The panel agreed that there were theoretical off-target edit risks for exa-cel, but overall it was unanimous that its efficacy benefit outweighs that risk. While this was not a formal FDA approval (just an Advisory Committee) the news was very encouraging and gave several Wall Street analysts, many of whom are either MDs or PhDs in the life sciences, greater confidence in an eventual FDA approval.

Following the Oct 31 AdCom, Truist analysts led by Dr. Joon Lee reiterated their $220 price target on CRSP shares as they envision strong physician support and sales for Casgevy (the commercial name for exa-cel) once it hits the market.

Then, on November 16 after a 2-week 50% rally in CRSP shares, the UK became the first national health regulator to approve Casgevy. Here’s what I told investors in my Healthcare Innovators portfolio where we bought CRSP again in the $40s...

CRISPR Goes Boom!

Healthcare Investor

Big News: The first CRISPR treatment has been approved!

We've been waiting a long time for this and the setbacks have been numerous. But this marks the early innings of what could become a very profitable field to invest in.

Vertex Pharmaceuticals (VRTX) and CRISPR Therapeutics (CRSP) won UK conditional marketing authorization for their Casgevy gene therapy, marking the world's first approval of a drug using the gene-editing technology known as CRISPR.

The companies announced on Thursday that the Medicines and Healthcare products Regulatory Agency (“MHRA”) of the United Kingdom has granted conditional marketing authorization to their CRISPR/Cas9 gene-edited therapy, Casgevy (exagamglogene autotemcel, or "exa-cel") for treating two debilitating blood disorders, sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT).

Pressure on the FDA... and on Insurance Payers

While the FDA had already set a decision date of December 8 for Casgevy in SCD, the Nov 16 approval from the UK put some added pressure on US regulators.

Then there is the pricing issue as these new gene therapies are expensive and require intense rounds of treatment. In Europe, insurance companies have resisted the need to pay for therapies costing over $1 million per patient.

And this proposed treatment is particularly complex as it involves extracting blood stem cells from a patient's bone marrow, editing those cells in the lab ex vivo (outside the body), and then infusing them back into the patient's body. This ex vivo approach is considered less risky because it can avoid off-target edits to other genes. But this complex treatment regime also includes chemotherapy and patients must be hospitalized for a month or possibly longer.

On Friday after the FDA announcement, Vertex and CRISPR revealed the price tag for the Casgevy treatment in SCD: $2.2 million. The market reaction by CRSP investors, after a pre-FDA spike on Friday above $75 to 16-month highs, was a classic “sell the news” back down to the mid-$60s. But volume was enormous at 17 million shares and that told me buyers were coming in off the lows near $62.

More important than investor reaction right now, for me anyway, was the response of one Nobel laureate with a huge stake in the development of CRISPR science into actual medicines. In her 2017 book, A Crack In Creation: Gene Editing and the Unthinkable Power to Control Evolution, she took a strong ethical stand on the power of technologies such as CRISPR to be misused. Here’s what she had to say upon the FDA approval of Casgevy...

"Going from the lab to an approved CRISPR therapy in just 11 years is a truly remarkable achievement," Doudna said, adding she was especially pleased that the approval helps patients with "a disease that has long been neglected by the medical establishment."

Writing for Genetic Engineering & Technology News, Kevin Davies, PhD. shared this perspective...

It is ironic that the first approved CRISPR therapy -- a technology barely ten years old -- should be for the genetic disorder that Linus Pauling famously dubbed "the first molecular disease" almost 75 years ago.

Davies, author of the 2020 book Editing Humanity: The CRISPR Revolution and the New Era of Genome Editing, also highlighted other voices who’ve been pointing out the neglect for SCD patients...

But despite these scientific milestones, the experience of SCD patients has not advanced to the same degree. As the late science journalist Sharon Begley put it plainly: "The U.S. healthcare system is killing adults with sickle cell disease." And while FDA approval of Casgevy is a moment for celebration, this approach won’t help the vast majority of patients worldwide. As Dhruv Khullar wrote in the New Yorker: "If we truly want to cure sickle-cell disease, editing genomes will only get us so far. We’ll need to rewrite our medical system, too."

Casgevy, Sickle Cell, and the Future of CRISPR

Approximately 100,000 people in the US have sickle cell disease (SCD), of mostly African-American descent, and more than 20 million people globally are afflicted.

Vertex and CRISPR say they hope to help the 20,000 Americans with the most severe cases of SCD who are willing to take the long road of complex treatment and cost hurdles to potentially transform their lives.

As always with debilitating disease and potential cures that offer both promise and risk, it helps to look at the individual stories of patients and their families that transform all the hard numbers into real faces.

I’ve heard at least three of these heart-wrenching stories in the past few months. In a Friday piece for the Wall Street Journal by Joseph Walker, FDA Approves World's First Crispr Gene-Editing Drug for Sickle-Cell Disease, he highlighted the story of a woman named Marie Tornyenu who had to be hospitalized sometimes and got monthly transfusions of healthy blood from a donor. Walker described how Tornyenu lived in fear of the bouts of extreme pain in her hips and legs that felt like a "dull ache that just burns and gets exponentially worse."

Knowing some of the forthcoming risks of the necessary chemotherapy, she began receiving Casgevy treatments in a clinical trial in 2021 after undergoing fertility treatment to preserve her eggs in case she wanted to have children in the future. After a few months, she was in a resurggence where not only the pain was gone but also the effecs of chemo.

Walker writes...

For the first time, she could take a walk around her neighborhood without getting fatigued. "I still thought about, 'What if I have pain?'" said Tornyenu, 22 years old, of Bethlehem, Pa. "But the pain never came."

Bottom line on CRSP

The breakthrough medical miracles should continue and open up all kinds of paths for CRISPR technology to make life better for millions of people with other “incurable” genetic diseases.

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