Long-time followers know that I call this the Century of Biology, and CRISPR gene editing its greatest discovery.
Well the world of CRISPR gene editing got a big boost in the aftermath of the annual American Society of Hematology (ASH) meeting.
Actually, shares of CRISPR Therapeutics CRSP were flying even before the 4-day virtual gathering of scientists and physicians which took place December 2-5.
That's because of clinical data abstracts released by CRSP and big partner Vertex VRTX on November 27 which caused the stock to vault above $110 and not look down again until $160.
That encouraging data was surrounding their treatment CTX-001 for sickle cell (SCD) and beta thalassemia, two debilitating diseases of the blood. While Jennifer Doudna and Emmanuelle Charpentier winning a Nobel prize in October for their discovery of CRISPR/Cas9 was breathtaking, this data was explosive for the science and companies because of medical efficacy and safety.
We had just taken 70% gains in CRSP over $100 and were looking for a shot to get back in but missed that train. At the time, the average Wall Street analyst price target was under $100, with Edward Tenthoff at Piper Sandler holding the high Street target of $110.
And in November, we took 155% long-term gains in Intellia Therapeutics NTLA.
You may recall in early September, I did a video and article on how to handle these vessels of our gene editing future...
CRISPR Stocks: Buy or Trade?
Since I have often owned all three primary CRISPR companies at once, you would think I would never be without such exposure to the future of medicine.
But I actually did the unthinkable when I also sold Editas Medicine EDIT in November, collecting only 40% long-term gains. Part of my decision was due to an initiation of coverage by a very bearish analyst from Baird who started EDIT with a $14 price target!
Yes, I felt naked.
But I adapted. When I saw the big move by CRSP in late Nov as we headed into the ASH meeting, I knew something big was probably happening as the medical community and investors reevaluated the efficacy and safety of gene editing.
After all, the companies leading in CRISPR technology R&D, CRSP and VRTX, were telling personal stories of a handful of SCD and b-thal patients living better lives almost a year later with no adverse effects.
So on December 2, I took a look at EDIT again and decided "it was a go" under $32. And boy am I glad I did as it rides the coattails of CRSP-VRTX success, nearly doubling since then -- with shares up another 20% today!
But Editas Medicine also revealed encouraging data in treating hemoglobinopathies, or diseases of the blood. And yesterday December 9, confident in their data, they announced the submission of an Investigational New Drug (IND) application to the FDA for the initiation of a Phase 1/2 clinical trial of EDIT-301, an experimental CRISPR/Cas12a gene editing medicine in development for the treatment of SCD (sickle cell disease).
Analysts Missed the CRISPR Rocket Too
I think I called this explosion in CRISPR stocks "a train" that many investors realized they just missed. Rocket would be the better metaphor.
But I left some big gains on the table also, in both CRSP and NTLA. I mostly blame myself for that. But anyone new to the world of CRISPR stocks wouldn't be wrong to blame the analysts too.
When I made the attached video on Wednesday, I mentioned that even the biggest Wall Street bull on CRSP still had his price target at $107. Well, today as I'm writing this article, Ed Tenthoff at Piper (a really good Biotech analyst I've followed for years) finally threw in the towel and boosted his objective to $180.
And over at Wells Fargo, analyst Yanan Zhu upgraded Editas Medicine to Overweight from Equal Weight with a price target of $69, up from $28, based on increased probability of success and increased market share assumptions for EDIT-301 in SCD. Zhu cited the company's announcement of an IND filing for EDIT-301 as well as recent ASH updates on EDIT-301 and the company's natural killer cell therapy programs for the improved outlook.
Still waiting to hear from that analyst at Baird about his old $14 calculations, which are proof that the mathematical models for world-changing science and medical technology often are not as simple as discounted cash flows and Bayesian probabilities.
To Invest or Miss Out -- That is the Question
Here's how I opened my September lecture CRISPR Stocks: Buy or Trade?
I have been investing in and trading the three primary CRISPR public companies for over three years because I believe they represent a paradigm shift in medicine and culture, with the potential to transform the world and life as we know it.
I even include the old-school gene editing company, Sangamo Therapeutics SGMO, because its original innovations with zinc finger nuclease "cut and paste" technology still seem to offer leverage on a future where many diseases can be eliminated or prevented.
This means these stocks offer asymmetrical risk/reward opportunities for biotechnology investors. But the ultimate payoffs could be many years down the road until important clinical trials prove the science is both effective and safe.
Until then, biotech investors will "do what we do" and speculate on those unknown futures. And that means the stocks will have big swings between hopeful euphoria and pessimistic fear.
(end of excerpt)
Be sure to click in the link above and read the full piece because I give my 5-point back-of-the-envelope decision method. These are the questions I asked myself each time I felt compelled to make a long-term investment or short-term trading decision about the stocks.
They form sort of an if/then matrix and you will find it useful given my recent successes (and my regrets) with owning (or not) the future of medicine.
Disclosure: At the time of publication, I own shares of EDIT, VRTX, and SGMO for the Zacks Healthcare Innovators portfolio.
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