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Down 47% Since March, Is CRISPR Therapeutics Stock a Buy on the Dip?

On Nov. 21, shares of CRISPR Therapeutics (NASDAQ: CRSP) were down 47% from a peak they reached in March. This might be a little surprising to folks who have been following this developer of gene therapies. After all, it’s been less than a year since regulators in the U.S. and E.U. approved its first therapy, Casgevy, to treat two blood-based disorders.

Casgevy’s initial launch hasn’t been as exciting as investors and its partner, Vertex Pharmaceuticals (NASDAQ: VRTX), had hoped. Less than a year into the launch, though, it’s still too early to turn our backs on this innovative drugmaker. After all, in addition to Casgevy, it has five other therapy candidates in clinical-stage testing.

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To see if adding some shares to your portfolio now makes sense, let’s look at why the stock’s been beaten down, and what could lift it back up.

The Food and Drug Administration (FDA) approved Casgevy for the treatment of sickle cell disease (SCD) last December. In January the agency followed up with approval to treat transfusion-dependent beta thalassemia (TDT).

Across the Atlantic, European regulators approved Casgevy to treat both SCD and TDT in February. Despite regulatory approvals, the launch is progressing more slowly than investors had expected.

CRISPR Therapeutics wisely partnered with Vertex Pharmaceuticals to develop and market Casgevy, but Vertex is having a hard time getting it off the ground. Despite earning approval in late 2023, Vertex didn’t record its first sale of Casgevy until the third quarter.

Sales have been slow because it’s a complicated therapy made in single batches from a patient’s stem cells. Once reinfused, the CRISPR-altered stem cells should produce functioning hemoglobin, so SCD and TDT patients no longer need regular blood transfusions. Unfortunately, reinfused Casgevy cells can’t gain a foothold unless patients first deplete their immune systems with a dangerous conditioning regimen.

Recently, a patient with SCD died during a gene-therapy trial run by Beam Therapeutics. Physicians running the study didn’t fault Beam’s candidate for the volunteer’s death; they blamed a conditioning regimen containing busulfan. Busulfan is also used to condition patients for Casgevy.

A lack of treatment options could work in Casgevy’s favor. Last year, the European Medicines Agency revoked conditional approval for an SCD drug from Novartis called Adakveo, after it failed to outperform a placebo in a confirmatory trial. And in September, Pfizer pulled Oxbryta, a daily tablet approved to treat SCD patients, from the market after it failed a postmarketing study.

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