Genetic Therapeutics: Stake Your Claim in the Fastest Growing Space of Biotech

5 min readApr 19, 2021

Written by Aanjaneyaa Venkataraman, Ria Arora, and Shilp Shah

As time passes, science never fails to surpass expectations and often gives us a glimpse of what the future entails. The power and potential of science are frequently reflected in the stock market as novel scientific discoveries tend to attract investors. CRISPR, a technology that can edit genes, has intrigued millions around the world as a treatment for cancer and many hereditary illnesses. Potentially presenting itself as a cure for some of the leading causes of death, such as B-cell cancers, CRISPR has the potential to grow immensely in the stock market. Companies such as CRISPR Therapeutics, Editas Medicine, and Vertex Pharmaceuticals are sparking the attention of investors, and CRISPR has already demonstrated promising results, such as its anti-tumor activity in a trial with patients with non-Hodgkin’s lymphoma. Specifically, the development of allogeneic CAR-T therapies is looking attractive to investors as currently, a patient’s cells are required each time to produce the necessary cell therapy. Allogeneic CAR-T therapies, however, are capable of inexpensive mass scale manufacturing, radically transforming how CAR-T therapies are produced. However, there are definitely ethical issues that cannot be ignored. With the success that CRISPR has had with genome editing, a logical step to take in the future would be to cure the disease before it even happens by editing the genome in the embryo itself.

First and foremost is the safety of the embryo and whether the germ-line editing might prove too risky and unsafe. There is still hesitance by a number of researchers, such as those present at the International Summit on Human Gene Editing. They claim that until we know whether germline genome editing is safe, using it for reproductive purposes is too risky. Another issue would be the disparity genome editing would cause between individuals in society. CRISPR would cause yet another layer of social stratification in society with wealthier individuals and potentially their entire bloodline being healthier than those who cannot afford such procedures.

Shilp’s take and recommendations: When it comes to the stock market, your approach should be dependent on how much risk you are willing to take. High risk, high reward is attractive to those who know a bad turn won’t financially cripple them, but to many, the risk is too hard to stomach. My recommendations will be for those looking for a stable option to enter the biotech space that has an almost guaranteed long term ROI (Return on Investment). There is no better option than Regeneron (REGN). The company isn’t primarily known for their work in the genetics field, but they have recently designated an entire section of their pipeline to examining and automating the process of gathering genetic data. It has yielded them the discovery of specific gene variants that actually reduce the chance for various chronic liver diseases such as nonalcoholic steatohepatitis, which previously had no treatment. I believe that an investment in Regeneron will be comfortably returned based on their 30% fourth quarter growth from 2019 to 2020, but their expansion into the gene therapy field gives them the potential for explosive gains in the next 3–5 years. If you’re the type of investor looking to get the steep green line in the near future, I’d recommend researching Bbluebird Bbio (BLUE) or Beam Therapeutics (BEAM).

Ria’s take and recommendations: Personally, I would invest in CRISPR, specifically in CRISPR Therapeutics, because I believe it has the potential to alter the genomics sphere substantially. This technology can be applied to multiple areas within healthcare ranging from oncology to gene therapy, and it continually improves as companies like CRISPR Therapeutics do more testing. While investing in CRISPR companies may take patience and can be risky due to the lack of revenue and profits, I believe that in the long run, the payoffs will definitely be worth the wait. CRISPR Therapeutics has been very promising, and their released data has had many investors excited for the future. For example, CRISPR Therapeutics and their partner, ViaCyte, are beginning to make strides in Type 1 diabetes treatment as they are planning to start a Phase 1/2 trial for their “allogeneic stem cell-derived therapy” (Bhade) in 2021. By branching into different sectors of healthcare, the company definitely demonstrates great promise for investors. By examining sheer statistics, it is clear to see CRISPR Therapeutics’ potential as the market cap is $9.481 billion, demonstrating good value for the company. Although the company’s profits and revenue are currently low, the biotechnology field is growing substantially, and a significant return is expected in the next few years.

Aanjaneyaa’s take and recommendations: Out of the CRISPR companies mentioned, I would push for Vertex Pharmaceuticals. I’m taking a purely fundamental analysis approach to looking at the three companies mentioned. The main measurements I use to see if a company is worth investing is total assets and liabilities, net income, ROE (Return on Equity), and leverage ratio. The assets, liabilities, and net income are used to calculate the ROE of each company looked at. ROE is a good measurement to see if a company is giving back profits to the shareholders over the long run. While a good ROE usually means good things for the company, a company could increase their ROE by taking on debt in order to keep afloat. This is where the leverage ratio comes in. If both the ROE and leverage ratio were high for a company, I would know that the company doesn’t necessarily have a strong foundation to invest in. Only Vertex Pharmaceuticals had a positive ROE of around 31.22%, while both CRISPR Therapeutics and Editas Medicine had negative ROE’s. Keep in mind that the healthcare sector’s average ROE for 2020 was around 11%. The leverage ratio for Vertex Pharmaceuticals is 0.06 which is fantastic as it is recommended to be below 0.5 as a general rule of thumb.

While biotechnology companies are not a new face to investors, companies expanding into the genetic field deserve select attention from those looking to ensure their spot in this rapidly growing space. Genetic therapy unlocks the answer to a whole class of previously incurable diseases, ensuring that there is no foreseeable negative inflection point on the progress that will continue throughout our lifetimes. However, ethical concerns are the main limiting point on how fast this progress will be allowed to occur, and like any good investor, it is important to look into what the company is actually doing in their labs rather than looking solely at their balance sheet. Each of our recommendations was made with these considerations in mind, and we hope that what we’ve gathered will help guide your entrance into the exciting field of gene editing.

Works Cited

Bhade, Manali. “If You Have $1,000 and 5 Years to Wait, Buy These 2 Stocks Now.” Nasdaq, 13 Dec. 2020, www.nasdaq.com/articles/if-you-have-%241000-and-5-years-to-wait-buy-these-2-stocks-now-2020-12-13.

Genetic Therapeutics: Stake Your Claim in the Fastest Growing Space of Biotech

Written by Bruin Medical Entrepreneurs