On Wednesday, Truist Securities adjusted its price target on CRISPR Therapeutics (NASDAQ:CRSP), bringing it down to $120 from the previous $160 while maintaining a Buy rating on the stock. The revision follows updates from CRISPR's commercial partner, Vertex (NASDAQ:VRTX), which led to a reassessment of the uptake assumptions for the drug candidate, CASGEVY.
The securities firm noted that although the number of treatment centers for CASGEVY has increased to 12 in the United States, the first patient dosing has yet to begin. The process from prescription to dosing is expected to take months due to the complexities involved in the infusion process. The firm also found the agreement with Synergie Medication Collective, which covers approximately 100 million lives, to be promising, as well as the engagement with Medicaid states.
Despite these developments, Truist Securities emphasized that patient enrollment remains a crucial metric for CASGEVY's success. Consequently, the firm has revised its penetration estimates for the drug. For 2024, the expectation for sickle cell disease (SCD) patient treatments has been reduced to 40 from the previous estimate of 100. For 2025, the forecast is now 100 SCD patient treatments, down from the earlier projection of 300.
Furthermore, the firm has moderated its sales ramp assumptions for CASGEVY. Peak U.S. sales for SCD are now projected to reach $1.5 billion in 2033, a decrease from the former estimate of $2 billion. Adjustments were also made to the beta-thalassemia market model, with peak U.S. sales now expected to hit $350 million in 2033, down from the prior estimate of $600 million. As a result of these changes, the sum-of-the-parts (SOTP) contribution of CASGEVY to the price target has been lowered to $32 from the earlier $50.
InvestingPro Insights
Amidst the reassessment by Truist Securities, CRISPR Therapeutics (NASDAQ:CRSP) presents a mixed financial landscape according to the latest data from InvestingPro. With a market capitalization of $5.25 billion, the company's financial health is bolstered by holding more cash than debt, an InvestingPro Tip that suggests a strong balance sheet. This could provide the company with a buffer to navigate the complexities of drug development and commercialization.
Analysts following CRISPR Therapeutics have also noted sales growth anticipation in the current year, which aligns with the potential for CASGEVY's market penetration, despite the recent adjustments in treatment and sales projections. However, it's worth noting that the company's gross profit margin remains negative at -201.65% for the last twelve months as of Q1 2023, indicating that CRISPR Therapeutics is still in a phase where it's investing heavily in research and development, outweighing its current revenue capabilities.
Investors considering CRISPR Therapeutics should be aware of the stock's volatility, as indicated by a price uptick of 38.35% over the last six months. While this may signal strong market interest, it also underscores the need for careful risk assessment. For those looking for more in-depth analysis, there are an additional 11 InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/CRSP. For a more comprehensive understanding of CRISPR Therapeutics' financials and future prospects, use coupon code "SFY24" to get an additional 10% off a 2-year InvestingPro+ subscription, or "SFY241" to get an additional 10% off a 1-year InvestingPro+ subscription.
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