Shares of genetic engineering specialist CRISPR Therapeutics (NASDAQ:CRSP) moved up modestly on Friday as stakeholders await a final regulatory decision regarding a key therapeutic. Earlier, CRISPR generated significant scientific buzz for its exa-cel gene editing solution to address sickle cell disease. While demonstrating promising results, safety concerns hang over the approval process, which carries significant implications for CRSP stock and the underlying industry.
According to a Reuters report, the U.S. Food and Drug Administration’s (FDA) staff reviewers asked the regulatory agency’s advisory panel to consider additional studies for exa-cel. Alongside CRISPR, ViaCyte – which was acquired by Vertex Pharmaceuticals (NASDAQ:VRTX) – partnered with the gene-editing firm in 2015 to develop the exa-cel therapeutic. It’s the first treatment to emerge from this research program.
In addition, exa-cel represents the first-of-its-kind product to reach the FDA for an approval decision, per Reuters. While the staff reviewers did not raise any concerns about the therapy’s efficacy, they pointed out issues related to “off-target” unintended genomic alterations. Such alternations may cause other side effects.
Moreover, exa-cel’s lab analysis only utilized a small genetic sample size. Therefore, the analysis may not be sufficient to determine a safety profile as it did not capture the diversity of the U.S. population for sickle cell disease.
The FDA will make a final decision on exa-cel’s use in patients aged 12 years and older by Dec. 8.
Huge Implications Await for CRSP Stock and the Gene Editing Innovation
Although witnessing choppy price action on Friday, CRSP stock managed to eke out a positive return in the afternoon session. Fundamentally, the underlying enterprise sits in a holding pattern. While the gene editing innovation offers much promise for a new wave of medical solutions, it also poses broader concerns.
Still, the general mood among Wall Street experts appears to be of cautious optimism. Only one analyst in the trailing one-year period — Morgan Stanley’s Terence Flynn — is outright negative on CRSP stock. Overall, the consensus shifts toward a buy assessment, with some holds sprinkled in.
Further, RBC analyst Luca Issi remarked that while the FDA focused on the risks of the gene editing technology, its concerns appear benign. Thus, Issi anticipates that additional studies will materialize only after the regulatory agency approves exa-cel.
Primarily, the importance of the therapeutic centers on its potential to facilitate a one-time treatment option for sickle cell patients. Such an approach contrasts sharply with frequent blood transfusions or once-daily drugs, such as Oxbryta by Pfizer (NYSE:PFE).
By the charts, investors are looking for CRSP stock to break out of its long-term holding pattern. In the trailing five years, shares only gained 8%, punctuated by a huge rally that started in late 2020.
Why It Matters
According to TipRanks, in the past three months, analysts rated CRSP stock as a consensus moderate buy. This assessment breaks down as nine buys, six holds and one sell. Moreover, the average price target lands at $84.14, implying about 112% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
