Cathie Wood Bought More CRISPR Therapeutics Stock 2 Days in a Row. Here's What She Sees in the Biotech Stock.

Cathie Wood, the founder of Ark Invest, holds $379.1 million worth of shares of CRISPR Therapeutics (CRSP -4.41%) and on Friday, Oct. 9, and Monday, Oct. 12, went on a CRISPR Therapeutics buying spree, buying $1.1 million worth of the stock and $2.3 million worth of CRISPR stock on back-to-back market days, both in her ARK Genomic Revolution ETF (ARKG -5.16%).

That’s a lot of faith in a biotech stock that is down a little more than 25% over the past year.

CRISPR’s lab has already demonstrated its CRISPR gene-editing proof of concept when it teamed with Vertex Pharmaceuticals (VRTX -1.77%) to produce Casgevy, which, with one intravenous (IV) infusion, has the potential to cure severe sickle cell disease and beta-thalassemia (two rare genetic blood diseases) in an individual.

The problem is that Casgevy is CRISPR’s only approved therapy, and it is prohibitively expensive, at a list price of $2.2 million per patient. It also affects a relatively small pool of SCD patients, about 100,000 in the U.S., and fewer than 3,000 beta-thalassemia patients in the U.S., and CRISPR has to share its Casgevy revenue with Vertex, which gets 60% of the revenue.

Despite that, here are three reasons why Wood might be bullish on the gene-editing stock.

1. Improving finances as Casgevy’s reach widens

In the second quarter, CRISPR reported $76 million in Casgevy revenue, a rise of 151% year over year. The company still isn’t profitable, but its net loss was $91.2 million, down from $208.5 million in the same period a year ago. The company has $2.36 billion in cash, easily enough to last four years, enough time for the company to develop other therapies.

Those numbers should continue to improve as Casgevy received the nod from the Food and Drug Administration (FDA) in July for use in patients as young as 2 years old with SCD or beta-thalassemia.

2. The next big thing for CRISPR?

Now, however, the company has another promising therapy with a much wider application, CTX-310. It uses small fat-based particles to deliver its gene-editing mechanism to the liver. Once there, it switches off a gene, angiopoietin-like protein 3 (ANGPTL3). Turning off this gene lowers LDL cholesterol and triglycerides, two lipids associated with heart disease.

In a phase 1a trial, CTX-310 demonstrated strong efficacy in reducing LDL cholesterol and triglycerides. Participants who were injected with CTX-310 showed, after 12 months, an average of a 79% reduction in the ANGPTL3 gene, a 53% drop in LDL, and a 48% decline in triglycerides.

3. Another key readout is on the way

The company is in the midst of a phase 2 trial for CTX611, a blood thinner being compared with the current standard, enoxaparin, in patients undergoing knee replacement. It expects a readout on the trial later this year. The therapy works by editing a patient’s small interfering RNA (siRNA) to make less of a protein, Factor XI, which forms blood clots.

CTX611 targets a multi-billion-dollar market opportunity across a wide range of clotting and thromboembolic conditions. Key potential indications include atrial fibrillation (AF), venous thromboembolism (VTE), ischemic stroke, cancer-associated thrombosis (CAT), peripheral vascular disease (PVD), chronic coronary artery disease (CAD), and thrombosis in chronic kidney disease (CKD).