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Could CRISPR Therapeutics Become the Next Moderna?

Motley Fool - Mon Mar 27, 5:00AM CDT

CRISPR Therapeutics(NASDAQ: CRSP) has a couple of things in common with a company that's made the headlines over the past few years: coronavirus vaccine maker Moderna (NASDAQ: MRNA). No, CRISPR, isn't working on a coronavirus vaccine. But the company does use groundbreaking technology to treat disease -- and, like Moderna a couple of years ago, it may be about to launch its first product.

Today, CRISPR's market value sits at about $3.4 billion. Back in 2019, before the pandemic, Moderna's market cap wasn't far off -- at about $4 billion. Since, Moderna has grown to become a $58 billion company, with a blockbuster product and three more potential ones on the horizon. Could CRISPR follow in the footsteps of this biotech success story? Let's find out.

Gene editing technology

First, let's look at CRISPR's technology. The company focuses on gene editing to "fix" faulty genes involved in disease processes. It uses the CRISPR/Cas9 gene editing tool to cut DNA -- and then a natural repair follows.

Moderna's vaccine and pipeline candidates harness the power of messenger RNA. The company uses mRNA to teach the body to produce proteins that will prevent or treat illness. The Moderna vaccine and the one sold by Pfizer and partner BioNTech are the first approved mRNA products.

So, both CRISPR and Moderna are offering a cutting-edge way of addressing disease. In Moderna's case, this has brought in annual product revenue of more than $17 billion over the past two years. Considering the upcoming shift to a post-pandemic situation, though, annual revenue likely will fall from that level. But yearly coronavirus boosters still could bring in blockbuster recurrent revenue.

CRISPR won't serve a pandemic with the candidate regulators are reviewing right now. So even if it wins a regulatory nod, it probably won't see the same level of sales Moderna did in the first year of vaccine sales. CRISPR and partner Vertex Pharmaceuticals have submitted exa-cel, a gene editing treatment for blood disorders, to regulators in the U.S., the U.K., and Europe.

That said, exa-cel could bring in blockbuster revenue. That's because there are limited treatment options today for blood disorders sickle cell disease and beta thalassemia. And expanded indications into new patient groups -- such as younger patients -- as well as reimbursement agreements could keep growth going.

Potential products nearing the finish line

Like Moderna, CRISPR might rely on only one product for a time -- exa-cel, if it wins approval. But also like Moderna, the company is working on other candidates using its winning technology. And at least one of these products is nearing the finish line. Immuno-oncology candidate CTX-110 has entered a phase 2 trial -- and this trial may be used to support a regulatory submission.

So, if all goes well, CRISPR could launch two products -- exa-cel and CTX110 -- over the next few years.

Could CRISPR then become the next Moderna? Let's look at the question from a few angles. First, from a market cap perspective. The average analyst forecast calls for CRISPR shares to double to $86.40 within the coming 12 months. That would bring the company to a market value of more than $6.7 billion. That's still very far from that of Moderna.

From a revenue perspective, CRISPR also is unlikely to match Moderna's coronavirus vaccine sales. But it's important to keep in mind that Moderna served a pandemic -- and that's an exceptional situation. Moderna's post-pandemic revenue may be a better comparison point. And here, once CRISPR launches a couple of products, it could make its way along the Moderna path.

Now, let's look at the question with the idea of an investor searching for a young biotech company promising growth -- and here, CRISPR also could win.

So, to answer our question, no CRISPR probably won't soar to the market value of Moderna or bring in revenue to match that of the coronavirus vaccine. At least not right away. But the company still could follow Moderna with the launch of game-changing products that could bring in blockbuster revenue. And that could make it a winning bet for investors now and over time.

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Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends CRISPR Therapeutics, Pfizer, and Vertex Pharmaceuticals. The Motley Fool recommends BioNTech Se and Moderna. The Motley Fool has a disclosure policy.

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