If you invested $10,000 in CRISPR therapeutics in 2019, this is how much you would have invested today.

Companies in the biotechnology industry can often generate explosive returns, especially those with the ability to innovate and break new ground. explaining CRISPR therapeutics (CRSP -2.67%) It’s pretty good. The company specializes in gene editing and has made significant progress in this field in recent years.

CRISPR’s efforts paid off. Biotech has generally delivered solid returns. How good has the stock market performed? Let’s find out how much $10,000 invested in the company would be worth today.

CRSP total return level data from YCharts.

It was a really difficult journey.

First, learn more about CRISPR therapeutics and the field of expertise. Gene editing is a set of technologies that allow scientists to modify an organism’s DNA, opening up the possibility of treating diseases that have long eluded the medical research community. As the name suggests, CRISPR Therapeutics focuses on the CRISPR gene editing method, a technology that earned its pioneers the Nobel Prize in Chemistry.

The past five years have been a rather rocky time in biotechnology. CRISPR Therapeutics’ stock soared early in the pandemic, thanks in part to advances at its clinic. But the biotech stock fell as market conditions worsened and investors turned away from somewhat speculative and unprofitable stocks.

Nonetheless, CRISPR Therapeutics ended 2023 with significant results. The company has received approval for its first product, a gene-editing therapy called Casgevy that treats two rare blood disorders: beta thalassemia and sickle cell disease (SCD). CRISPR Therapeutics created the drug, but developed it with the help of Vertex Pharmaceuticals. With this approval, CRISPR Therapeutics can now boast that its platform can deliver important breakthroughs.

So, what would a $10,000 investment in CRISPR Therapeutics in 2019 be worth today? The company achieved a compound annual growth rate (CAGR) of 19.3% during this period, enough to turn $10,000 into $24,146. that much S&P 500A 14.8% CAGR over the same period would have grown the same investment to $19,896.

the future is bright

Can CRISPR Therapeutics generate similar returns over the next five years? It depends on at least two things. The first is the company’s ability to continue to deliver meaningful clinical and regulatory progress. The second is Casgevy’s potential success in the market. Let’s start with Casgevy. In the US, it carries a price tag of $2.2 million. That may sound like a lot of money, but it’s about average for a gene-editing therapy.

A competing SCD treatment called Lyfgenia, which was approved late last year, would cost $3.1 million. The biotechnology behind it is Bluebird Bio, never mind Vertex Pharmaceuticals, a much smaller company than CRISPR Therapeutics. Given Vertex’s expertise in negotiating deals with third-party payers and its much larger pocketbook and footprint in the industry, Casgevy should be much more successful than Lyfgenia. That’s before we even consider that Lyfgenia may come with a risk of blood cancer.

Vertex and CRISPR Therapeutics plan to initially target 35,000 patients. This represents a potential market of more than $70 billion. Because gene-editing treatments are complex to administer, it will take some time for Casgevy’s revenue to grow, but it should happen before 2029. CRISPR Therapeutics will keep 40% of the profits and cover 40% of the associated costs. We provide medicines under contract with Vertex. But for a company that currently has little revenue and continues to be unprofitable, this is good enough.

What about clinical progress in biotechnology? CRISPR Therapeutics has five different programs in clinical trials, with more likely to appear in clinical trials in the coming years. The company is researching several cancer treatments and aims to develop a functional treatment for type 1 diabetes. It’s unlikely that all of CRISPR Therapeutics’ programs will succeed, but at least some of them should, and thanks to Casgevy’s windfall, it may be able to raise more funding.

In short, while CRISPR Therapeutics’ performance over the past five years is hard to match, the biotech stock is well-positioned to deliver above-average future returns.