Is CRISPR Therapeutics a Millionaire Maker?
With a gene therapy for two illnesses out the door, and with sales slated to take off over the next few quarters, CRISPR Therapeutics (NASDAQ: CRSP) is making it a good time to be a shareholder.
But could this biotech's halcyon days be so good that a $10,000 investment today could end up being worth millions of dollars? Although such returns may seem wild, history is full of many such wealth-generating events. Let's dive in and explore if investors can bank on CRISPR Therapeutics stock to generate ground-breaking returns.
The outlook is positive, and it could get even better
If CRISPR Therapeutics is going to experience dramatic growth, the road to becoming a millionaire will be called Casgevy.
Casgevy, the biotech's first medicine to be approved for sale, is a gene therapy that treats -- or effectively cures -- a pair of hereditary blood diseases, sickle cell disease (SCD), and transfusion-dependent beta thalassemia (TDT). Since the U.S. Food and Drug Administration (FDA) granted approvals for both indications only in December 2023 and January 2024, respectively, the therapy hasn't had enough time to generate a full quarter's worth of revenue data.
However, it's a given that the company's top line should grow expeditiously, since prior to the approval of Casgevy, it only generated revenue from development collaborations. The average estimate among Wall Street analysts is that CRISPR Therapeutics will bring in roughly $81 million in revenue this year, and then $356 million next year, all largely from sales of Casgevy.
Though they don't expect the company to be profitable until after 2025, there are a couple of analysts who think the company could report positive earnings per share (EPS) within the next 18 months. And in that period, there will probably be at least a few data points from quarterly earnings that suggest some progress toward profitability. There won't be any shortage of growth in the near term.
Looking a bit further out, CRISPR Therapeutics has plenty of promising pipeline programs that could drive more growth, assuming that clinical trials conclude without incident and that regulators approve them for sale.
Of particular interest is the CTX211 program for type 1 diabetes, which is currently in phase 1 trials. CTX211 aims to treat or perhaps even effectively cure the condition, using genetically edited stem cells that are intended to replace a patient's dysfunctional pancreatic progenitor cells. According to Maximize Market Research, the global market for type 1 diabetes medicines will be worth nearly $39 billion by 2029, so there'll be a huge amount of demand if the program's remaining clinical trials work out.
The company also has other high-impact clinical programs in later stages of development which are intended to treat conditions like renal cell carcinoma, B-cell malignancies, and even atherosclerotic cardiovascular disease (ASCVD). It only needs to win with a couple of those attempts to experience another massive growth spurt like it's undergoing now. And that means the case for it being a good stock for wealth-building is alive and well.
A possible wealth generator, but not in the millions
The biggest barrier to CRISPR Therapeutics being a millionaire-maker stock is that it's already a fairly large company. Its market cap is currently around $4.8 billion. At that size, it isn't reasonable to expect it to 10x in value without the process taking years and years.
Of course, that could still happen within the decade, if both its commercialization of Casgevy, and all its programs in the pipeline turn out to be successful, but don't bank on it. Even under those perfect conditions, instead of $10,000, you'd likely need to invest upwards of $100,000 to see a return on the order of $1 million. For most investors, that's not a realistic amount to have on hand, or to commit to a single biotech stock. So this stock is probably not a great ticket to generating wealth.
Nevertheless, the stock could consistently add to the value of the typical long-term retail investor portfolio. So long investors aren't looking for lottery ticket-style returns, CRISPR Therapeutics could find favor with them.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CRISPR Therapeutics. The Motley Fool has a disclosure policy.
