Shares of CRISPR Therapeutics (NASDAQ:CRSP) recently dipped after the company reported positive clinical-trial results that were positive, but perhaps not positive enough to outrun the competition. Does this biotech's recent dip make it a good stock to buy at the moment? To find out, let's weigh reasons to buy now against reasons to exercise caution.

Reasons to buy CRISPR Therapeutics

CRISPR Therapeutics recently turned some heads with an interim look at a clinical trial with non-Hodgkin lymphoma patients and CTX110, an experimental therapy that's actually an infusion of immune cells engineered to recognize CD19, a protein often found on the surface of cancer cells.

Cellular therapies that use CD19-targeting chimeric antigen modified T-cells (CAR-T) already exist, but they're not as popular as they could be because a new batch must be manufactured from a patient's own cells. Instead of waiting weeks for a complicated process, treatment with CTX110 can begin as soon as patients and their oncologists decide to try it.

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If results from an ongoing study continue to impress, there could be enough demand for CTX110 to generate blockbuster sales for CRISPR Therapeutics. As of Sept. 28, 2020, investigators had treated four patients with the dosage strength selected for further study. The first two patients from this group have already achieved complete remission, and the two more recently dosed with CTX110 haven't gotten any worse.

The CRISPR Therapeutics pipeline boasts two more wholly owned allogeneic CAR-T candidates in clinical-stage testing. The company is currently dosing multiple myeloma patients with CTX120, a candidate targeting BCMA, another protein often found on the surface of cancer cells. CRISPR Therapeutics is also enrolling patients with kidney cancer and other forms of lymphoma into phase 1 trials with CTX130, a candidate that targets CD70.

In addition to a wholly owned cancer pipeline, CRISPR Therapeutics is co-developing CTX001 in partnership with Vertex Pharmaceuticals (NASDAQ:VRTX). This is an experimental gene therapy for people with severe conditions arising from their inability to produce functional hemoglobin. The partners reported impressive interim results from clinical trials with CTX001 in June, and more data from this program is expected by the end of 2020.

Reasons to be nervous

CRISPR Therapeutics isn't the only biotech out there developing allogeneic cancer therapies. In May, shares of Allogene Therapeutics (NASDAQ:ALLO) skyrocketed after the company presented interim results from a phase 1 trial with non-Hodgkin lymphoma patients treated with the company's anti-CD19 allogeneic CAR-T candidate, ALLO-501. It's hard to make meaningful comparisons between different patient populations, but so far, efficacy results from ALLO-501 and CTX001 appear similar.

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If allogeneic cancer therapies from CRISPR Therapeutics eventually earn approval, they'll also have to compete with today's autologous CAR-T treatments. Using a patient's own cells to manufacture their treatment is a complicated process but seems more reliable.

In 2017, the Food and Drug Administration (FDA) approved Yescarta, an autologous anti-CD19 CAR-T treatment for non-Hodgkin lymphoma after it shrank tumors for 73% of patients treated with a single administration and helped 52% achieve complete remission. In the ongoing study with ALLO-501, some patients are receiving multiple administrations over several months, and CRISPR Therapeutics has included redosing as an option for patients receiving CTX110. While it's nice to have the option, infusions of CTX110 are preceded by a white blood cell depletion process that nobody wants to repeat.

In the numbers

Investors who were disappointed with CTX110's performance compared to ALLO-501 and currently available CD19-directed CAR-T drugs recently removed more than $1 billion from CRISPR Therapeutics' market cap. Despite the dip, this is still a $6.4 billion company that can't tell us when it's going to have a product ready to sell.

After burning through $149 million in the first half of the year, CRISPR Therapeutics finished June with $945 million in cash. The company offered new shares in early July that added about $450 million more to its coffers.

If CRISPR Therapeutics weren't developing drugs meant to be sold just once, it might be a good biotech stock to buy at recent prices. Unfortunately, it could be a few years before we know if the tumor responses that CTX110 produces are durable enough to drive blockbuster sales.



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