CRISPR therapies (NASDAQ: CRSP) And Modern (NASDAQ: MRNA) have a lot in common. They are both innovative biotech companies working in relatively newer niches of this booming industry.
This year, however, they have gone in the wrong direction. Shares of CRISPR are down 27% this year, and shares of Moderna are down 41%. Regardless of their performance so far in 2024, both stocks are worth investing in this month. Read on to find out why.
1. CRISPR Therapies
CRISPR Therapeutics recently made a breakthrough when it received approval for its first product, Casgevy, a therapy for sickle cell disease and transfusion-dependent beta-thalassemia. Casgevy is also the first drug on the market that uses the well-known CRISPR gene editing technique. Given this important milestone, why is the company underperforming the market?
Here are two possible reasons. First, after Casgevy’s approval, some investors decided to take some profits. Second, it will take some time before Casgevy makes a meaningful contribution to CRISPR Therapeutics’ financial results. Ex vivo gene editing drugs, such as Casgevy, require patients’ cells to be collected and used to manufacture the treatment before reinserting it into the treatment. The process takes some time and can only be performed in qualified treatment centers.
While it’s impossible to ignore these factors, investors may be underestimating Casgevy’s prospects. CRISPR Therapeutics collaborated with biotech giant Vertex Pharmaceutica to develop and market it. As a result, the drug gained approval in places that a mid-cap biotech itself might not have targeted: Saudi Arabia and Bahrain. These markets alone have approximately 23,000 eligible patients. The partners estimate an addressable market of 35,000 people in the US and Europe.
Casgevy, at a price of $2.2 million in the US – and very little competition to speak of, at least for now – could easily easily surpass the $1 billion revenue milestone. Yes, it might take a little longer than if Casgevy were an oral pill, but patient investors should bide their time.
That’s why CRISPR Therapeutics is a great stock to buy this month. It hasn’t performed well this year, but in the long term it has the resources to become a major player in the promising field of gene editing. Interested investors should snap up the company’s shares while they’re in trouble.
2. Modern
Moderna has made a name for itself during the pandemic by developing and commercializing a successful COVID-19 vaccine. Although sales of this product have fallen off a cliff, the company has made a lot of progress.
Moderna is laying a solid foundation that will allow it to perform well in the long term. That starts with newer approvals: Moderna has now been greenlit for an RSV vaccine called mRESVIA and should launch at least one other product within the next few years.
The company’s combined coronavirus/flu vaccine has passed a Phase 3 trial. It caused higher immune responses than some individual vaccines in both categories in the final phase of the study.
Few people like to take photos even when necessary. Getting one is better than two, provided patients don’t have to sacrifice efficacy. It seems like that won’t be a problem.
Moderna has several other Phase 3 candidates: a potential standalone flu vaccine, one for cytomegalovirus (there isn’t one at the moment), another for norovirus, and another being developed as a personalized cancer vaccine in collaboration with Merck. Moderna should recover over time, even if its financial results don’t inspire confidence right now.
What does that mean for investors? The stock is down 41% year to date. There are several potential catalysts ahead related to the late stage of the company’s pipeline that could jolt the stock price.
In the long term, Moderna’s extensive pipeline of mRNA-based products should help the company develop a large number of successful candidates. Now is a good time to buy.
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*Stock Advisor returns October 7, 2024
Prosper Junior Bakiny holds positions at Vertex Pharmaceuticals. The Motley Fool holds positions in and recommends CRISPR Therapeutics, Merck, and Vertex Pharmaceuticals. The Motley Fool recommends Moderna. The Motley Fool has a disclosure policy.
2 Biotech Stocks That Are Screaming Buys This Month was originally published by The Motley Fool
