1 Underrated Stock That Could Soar by 58%, According to Wall Street

Though it started the year strong, CRISPR Therapeutics (CRSP 1.52%) is experiencing a pullback. Over the past month, shares of the gene-editing specialist are down 23%. But there is plenty of upside for the biotech. Or at least, that’s the consensus on Wall Street. CRISPR Therapeutics’ average price target of $82.41 (according to Yahoo! Finance) implies an upside of almost 58% from its current levels.

Should investors put their hard-earned money into CRISPR Therapeutics right now? Let’s find out.

The first CRISPR-based medicine

About two years ago, CRISPR Therapeutics made a significant breakthrough. It earned approval for Casgevy, a one-time curative medicine for sickle cell disease (SCD) and transfusion-dependent beta-thalassemia (TDT). It was an important milestone, as Casgevy, which CRISPR Therapeutics developed with Vertex Pharmaceuticals, became the first approved CRISPR-based gene-editing medicine — a technique that earned its creators a Nobel Prize.

However, Casgevy’s launch has been pretty disappointing so far. One reason is that, as an ex vivo gene-editing medicine, it is complex to administer. It requires collecting cells from patients, manufacturing the therapy for each, and infusing it into the patient. As of the third quarter, CRISPR and Vertex have completed cell collections for just 165 patients. CRISPR Therapeutics reported $889,000 in revenue in the period, up from the $602,000 recorded in the year-ago quarter.

That’s not a lot for a company worth $4.8 billion. The good news is that CRISPR Therapeutics expects Casgevy to gain more traction next year as patient cell collection ramps up. And considering there are few treatment options for SCD and TDT — and the medicine could target up to about 60,000 patients — it could still generate decent sales for the biotech. If Casgevy can make solid progress next year, that could help jolt CRISPR’s financial results and stock price.

Clinical progress will be the primary catalyst

In addition to Casgevy’s progress, it will be essential to monitor CRISPR Therapeutics’ clinical development. The company has several promising candidates in early-stage studies. One of them is called CTX310, a medicine being developed to lower LDL cholesterol and triglycerides (TGs), both of which, in high levels, can cause various cardiovascular conditions.

Here’s the best part. Although there are effective, pharmaceutically approved ways to lower LDLs and TGs, it’s generally with regular treatments — sometimes pills taken once a day, for instance. CTX310 works by inhibiting a gene that controls LDL and TG levels, thereby targeting the problem at its root. It could be a one-time cure. No need to take daily pills to lower bad cholesterol anymore. That could be a paradigm shift in this area, and the potential addressable market is significant.

CRISPR Therapeutics estimates that, in the U.S. alone, more than 40 million patients have elevated TGs or LDL. Further, CTX310 is an in vivo gene-editing therapy, so it avoids the cell collection process and is therefore easier to administer than ex vivo therapies like Casgevy. That’s why this therapy’s prospects look highly attractive. And it is performing pretty well so far in early-stage studies. CRISPR has other exciting candidates in the pipeline, including CTX320, a potential medicine designed to help lower levels of Lipoprotein(a), which can also cause heart attacks and strokes when it gets too high.

If CRISPR Therapeutics can make steady progress with both CTX310 and CTX320 in the next 12 months, the company’s shares could jump significantly.

Is CRISPR Therapeutics a buy?

Will CRISPR Therapeutics match Wall Street‘s price target by this time next year? It’s hard to say. Even with potential clinical and commercial catalysts on the horizon, too many things could go wrong for the biotech. And rising 58% in a year is no small feat for a biotech worth almost $5 billion. But should long-term investors consider the stock? There are, undeniably, many risks here.

However, with a proven platform for developing breakthrough therapies, a medicine that is slowly but surely ramping up, and several exciting pipeline candidates, CRISPR Therapeutics looks like one of the more attractive mid-stage biotechs. Risk-averse investors should probably look elsewhere, but those comfortable with higher risk and volatility should strongly consider the stock.