Mixed Signals For CRISPR Therapeutics, Analyst Weighs Barriers, Potential Sales For Sickle Cell Therapy

Cantor Fitzgerald has downgraded CRISPR Therapeutics AG CRSP to Neutral from Overweight, noting that its sickle cell therapy, exa-cel, in partnership with Vertex Pharmaceuticals Inc VRTX, is expected to be approved on or around its PDUFA date (8 December).

The analyst also notes that the AdComm panel (31 October) could feature some interesting new disclosures, and CMC considerations pose an unquantifiable risk. 

However, Cantor expects a positive recommendation, given exa-cel's highly favorable benefit-risk in a severe indication.

Driven by Vertex's support and experience, exa-cel is expected to become the leading therapy for SCD, the analyst writes.

It could take time to break down the many potential barriers to adoption. Cantor has reduced estimates and expects sales to fall short of consensus (2024E sales of $150 million), though with time, exa-cel's sales could become meaningful.

CRSP has a robust economic deal with Vertex and has cash of around $1.8 billion, but the analyst says it lacks conviction in other pipeline candidates. 

As gene editing technology becomes more commonplace, the performance of CRISPR Therapeutics stock is poised to be tightly linked to its product lineup. While exa-cel stands out, the rest of CRSP's pipeline offers limited excitement.

Cantor notes that the sum-of-the-parts valuation suggests CRSP shares are fairly valued.

Price Action: CRSP shares are down 2.60% at $43.65 on the last check Tuesday.