Gene editing utilizes enzymes that cut part of the DNA strand, allowing the insertion of replacement DNA. Several approaches to gene editing have been developed, the most well-known of which is CRISPR-Cas9. It is the most accurate, quickest and least expensive method. Developments in the gene editing space have led to valuable stocks with strong ratings emerging that are worthy of investment.
However, not all of these companies are profitable. In fact, the majority are not. Most of the gene editing stock opportunity lies in the promise of growth that will create future profitability rather than current solid fundamentals.
That’s something of a problem because many companies with such a profile never fulfill their potential. So, it is wiser to identify gene editing stocks that are either currently profitable or show the potential to soon become so. Let’s take a look at three gene editing stocks that fulfill those requirements.
CRISPR Therapeutics (CRSP)
CRISPR Therapeutics (NASDAQ:CRSP) is the original developer of the predominant gene editing technology. It is very much a stock worth investing in on the basis of FDA approval of Casgevy.
The company is investing heavily to expand the market for the drug. Investments in research and development and market expansion are part of the reason that the company’s net losses more than doubled in the first quarter, reaching $116.6 million. CRISPR Therapeutics boasts more than $2 billion in cash reserves indicating that the business is well-funded into the future.
Casgevy is priced at approximately $2.2 million per dose. It may effectively act as a functional cure for sickle cell disease and transfusion-dependent beta-thalassemia. Sickle cell disease affects more than 100,000 Americans and 2 million people worldwide. That should give readers an idea of the immense opportunity ahead of the company.
The company is expected to commercialize other CRISPR-Cas-9 based therapeutics moving forward. It is central to the gene editing market which is why CRSP stock is highly rated.
Vertex Pharmaceuticals (VRTX)
Vertex Pharmaceuticals (NASDAQ:VRTX) is currently rated as a buy from the analysts covering the stock.
Together with CRISPR Therapeutics, Vertex utilized gene editing technology to successfully launch gene therapies for inherited blood disorders leading to strong fundamentals.
Vertex was given FDA approval for Casgevy as a treatment for a rare inherited blood disorder in January. That was the second FDA approval following a December green light from the FDA in the treatment of sickle cell disease. It is expected that Casgevy will reach peak sales of $400 million annually.
Outside of Vertex Pharmaceuticals success in developing gene editing therapeutics, investors should also note its fundamental performance. The company is one that has produced overall net profits for the past five years and beyond.
That combination of strong fundamental performance and the ability to bring gene editing to commercial viability make Vertex Pharmaceuticals a strong investment.
Schrödinger (SDGR)
Schrödinger (NASDAQ:SDGR) is another interesting gene editing stock to watch because the company has harnessed the power of AI in its business.
Before discussing that, let’s get into what Schrödinger is as a business. The company is a software and drug discovery firm. Schrödinger has developed a physics-based computational platform geared toward the discovery of novel molecules.
The company leverages that platform to build a pipeline of its own clinical programs. Schrödinger also sells access to its platform to other pharmaceutical firms.
Schrödinger’s software aligns with the research needs across companies in the gene editing space, touching heavily on the pharma sector. While the company does not break out its sales at the level of individual companies, Schrödinger is likely working with multiple gene editing firms.
Analysts hold the stock in high regard. Consensus estimates forecast shares to more than double. Schrödinger is leveraging AI and its wide ranging applicability in the pharma sector means it touches on gene editing and remains a highly touted investment.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.