After being halted yesterday during the deliberations of a Food and Drug Administration (FDA) advisory committee, CRISPR Therapeutics (NASDAQ:CRSP) stock is rallying 5% today in early trading. That’s because the FDA panel appeared to view the company’s treatment for sickle cell anemia, exa-cel, as safe. The treatment is a “gene-edited therapy.”
Crispr developed the therapy in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX).
Meanwhile, the amount of short interest in CRSP stock is quite high, making the name a good candidate for a short squeeze.
More About Exa-Cel and the FDA Panel’s View on It
Exa-cel works by altering genes in the bodies of patients with sickle-cell anemia. Such gene-editing treatments are seen as potential cures for many inherited diseases.
However, the FDA was concerned that exa-cel could mistakenly target genes that are unconnected with sickle cell, increasing cancer risks. As a result, it asked a panel of experts to discuss whether CRISPR had conducted enough research to prevent the latter negative scenario.
Most panel members did not seem overly concerned about the issue, but “several” of them did indicate that additional tests could be warranted, Seeking Alpha reported.
Also noteworthy is that the FDA’s staff classified Exa-cel’s performance in tests as “strongly positive.”
CRSP Stock: Lots of Short Interest
On Oct. 30, 62.27% of the trading of CRSP stock outside of the major stock exchange was carried out by short sellers, Fintel reported.
Moreover, nearly 18% of the company’s outstanding shares are being borrowed by short sellers.
In light of this data, a short squeeze could cause the shares to soar tremendously in the not-too-distant future.
As of this writing, Larry Ramer did not hold (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.
