Monday, 1 January 2024
by Earn Media
Ark Invest CEO/CIO Cathie Wood is known for her ability to spot disruptive technologies and invest in them through her company’s family of exchange-traded funds, or ETFs. Ark Invest’s flagship ETF, Ark Innovation ETF (NYSEMKT: ARKK), focuses on companies that are at the forefront of innovation, with many being in the early stages of development.
This strategy has resulted in high levels of volatility and underperformance for the fund at times, but Wood is a long-term investor who thinks that investing in game-changing tech can deliver massive returns over time. One area where Wood has shown her unique foresight is in the emerging field of gene editing.
CRISPR Therapeutics (NASDAQ: CRSP) has been in Ark Invest’s portfolio since the second quarter of 2017, and the investment firm is now the biotech’s biggest shareholder, based on the latest 13F filings with the Securities and Exchange Commission. Wood’s willingness to hold shares of this novel biotech over a multiyear period is starting to look like a brilliant move.
This year, CRISPR Therapeutics achieved a significant operational milestone, with the first regulatory approvals for its gene therapy Casgevy, which it co-developed with Vertex Pharmaceuticals (NASDAQ: VRTX). Casgevy was approved in the U.K. for two rare blood disorders, severe sickle cell disease (SCD) and beta0thalassemia.
Shortly after, the U.S. Food and Drug Administration (FDA) also approved the therapy for severe SCD in patients 12 years or older. CRISPR and Vertex are expected to receive a decision from the FDA on Casgevy’s status for beta thalassemia next March. Most analysts believe that the therapy will score another approval in this setting, which could set it on the path toward blockbuster-level sales.
Initial surveys among hematologists indicate that robust demand already exists for Casgevy. However, the therapy may still get off to a slow start due to its novelty and logistically burdensome manufacturing process. In other words, CRISPR’s first commercial product is unlikely to get off to a blistering start. If true, CRISPR’s shares could come under pressure in 2024.
This unfavorable dynamic shouldn’t concern long-term investors, however. Despite the real possibility of a slow ramp, most analysts think Casgevy will surpass $1 billion in annual sales before the end of the decade.
In addition, CRISPR sports a broad pipeline of differentiated candidates for multiple high-value indications, such as cancer, diabetes, and certain forms of cardiovascular disease. The company thus has a real shot at becoming a multi-product juggernaut down the road.
The market is rarely patient with new drug launches. So if CRISPR’s stock price does indeed fall in response to tepid sales figures for Casgevy, you probably shouldn’t hesitate to buy this biotech stock hand over fist. After all, the long-term trajectory for this genomic medicine company is extremely bright.
Speaking to this point, gene editing is a powerful new modality that will probably bend the curve on scores of inherited diseases, and CRISPR is a first mover
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