Cathie Wood, CEO/CIO of Ark Invest, is known for her ability to spot disruptive technologies and invest in them through her company’s family of exchange-traded funds, or ETFs. Ark Invest’s flagship ETF, Arche Innovation ETF (NYSEMKT:ARKK)focuses on companies that are at the forefront of innovation, many of which are in the early stages of development.
This strategy has at times led to high levels of volatility and fund underperformance, but Wood is a long-term investor who believes investing in revolutionary technology can generate massive returns over time. One area in which Wood has demonstrated unique foresight is that of the emerging field of gene modification.
A major step for gene editing
CRISPR therapeutics (NASDAQ:CRSP) has been part of Ark Invest’s portfolio since the second quarter of 2017, and the investment firm is now the biotech’s largest shareholder, based on the latest 13F filings with the Securities and Exchange Commission. Wood’s willingness to hold shares of this new biotechnology over a period of years is starting to look like a brilliant move.
This year, CRISPR Therapeutics reached an important operational milestone, with the first regulatory approvals for its Casgevy gene therapy, which it co-developed with Vertex Pharmaceuticals (NASDAQ:VRTX). Casgevy has been approved in the UK for two rare blood disorders, severe sickle cell disease (SCD) and beta thalassemia.
Shortly after, the United States Food and Drug Administration (FDA) also approved the treatment of severe sickle cell disease in patients 12 years of age or older. CRISPR and Vertex are expected to receive a decision from the FDA on Casgevy’s status for beta thalassemia next March. Most analysts believe the therapy will gain further approval in this context, which could put it on a path to blockbuster sales.
Why is CRISPR Stock a Buy in 2024?
Initial surveys among hematologists indicate that there is already high demand for Casgevy. However, the start of the therapy may still be slow due to its novelty and the logistical cumbersomeness of its manufacturing process. In other words, it’s unlikely that CRISPR’s first commercial product will get off to a flying start. If true, CRISPR stock could be under pressure in 2024.
However, this unfavorable dynamic should not worry long-term investors. Despite the real possibility of a slow ramp-up, most analysts believe Casgevy will surpass $1 billion in annual sales before the end of the decade.
Additionally, CRISPR offers a broad pipeline of differentiated candidates for several high-value indications, such as cancer, diabetes and certain forms of cardiovascular disease. The company thus has a real chance of eventually becoming a multi-product heavyweight.
What is the end result?
The market is rarely patient with new drug launches. So if CRISPR’s stock price does indeed fall in response to Casgevy’s tepid sales numbers, you probably shouldn’t hesitate to buy this biotech stock in a hurry. After all, the long-term trajectory of this genomic medicine company is extremely promising.
In this regard, gene editing is a powerful new modality that will probably make it possible to bend the curve of a large number of hereditary diseases, and CRISPR is a first come
Should you invest $1,000 in CRISPR Therapeutics right now?
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1 Cathie Wood Stock Worth Buying in 2024 was originally published by The Motley Fool