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Better Buy: CRISPR Therapeutics vs. Editas Medicine

You can’t use traditional means to compare CRISPR Therapeutics (NASDAQ:CRSP) and Editas Medicine (NASDAQ:EDIT) because they are emerging biotech companies with little revenue, and several years between their current efforts and any form of profitability.

Both of these companies are developing medicines that edit genes, using the same CRISPR technology. The system is capable of eliminating mutated DNA that cause a particular disease, such as sickle-cell anemia, some types of blindness, or Alzheimer’s.

The potential for CRISPR gene-editing is enormous. A study by Market Insights puts the global gene therapy market at $18.1 billion by 2027, giving it a compound annual growth rate (CAGR) of 25.7%. Figuring out which gene-editing biotech to invest in depends less on their fundamentals and more on which one seems most capable of developing marketable therapies based on the available technology.

Hands of scientists working with test tubes in a laboratory.

Image source: Getty Images.

The case for CRISPR

CRISPR Therapeutics has certainly been kinder to shareholders since January. Its share price is up over 37% year to date, while the share price for Editas has been flat. Much of the enthusiasm surrounding CRISPR Therapeutics stems from two of its therapies that have shown progress this year.

The first is CTX001, which CRISPR has been developing with Vertex Pharmaceuticals (NASDAQ:VRTX) as a treatment for two genetic blood disorders: severe sickle cell disease (SCD) and transfusion-dependent beta thalassemia (TDT). According to CRISPR Therapeutics, CTX001 edits a patient’s stem cells from within their bone marrow and instructs those cells to produce high levels of fetal hemoglobin (HbF) in their red blood cells. HbF, a hemoglobin that carries oxygen, is present at birth but is replaced with the adult form of hemoglobin by the body as we age. The thought is fetal HbF will eliminate the need for transfusion in TDT patients and will help reduce the number of sickle crises experienced by SCD patients.

CTX001 is in two phase 1/2 trials: CLIMB-111 and CLIMB-121. CLIMB-111 involves five TDT patients and CLIMB-121 has enrolled two SCD patients. While the sample sizes are obviously small, the company says that all seven patients so far have achieved blood platelet engraftment. Based on those results, the U.S. Food and Drug Administration (FDA) has given CTX001 Orphan Drug and Fast Track Designation for both SCD and TDT.

CRISPR Therapeutics listed only $44,000 in collaborative revenue in the second quarter, but the important number is the company’s $945 million in cash reserves. At the company’s cash burn rate, these reserves can last nearly three years before the company needs an infusion of cash or a profitable therapy.

CRSP Chart

CRSP data by YCharts

The case for Editas Medicine

On Aug. 25, the FDA granted Editas Medicine’s therapy, EDIT-301, rare pediatric disease (RPD) designation to treat sickle cell disease. That means the company gets a voucher from the FDA to receive a priority review on a different drug or therapy. The FDA does this to encourage research into medications that affect fewer than 200,000 people in the United States.

Like CRISPR, Editas is getting help from