CRISPR Thereapeutics (CRSP) stock is flying today. In this column, we discuss who this company is and why the stock is flying. More specifically, we hone in on performance of the name and recent key developments to be aware of.
CRISPR Therapeutics is a leading gene editing company focused on developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform. CRISPR/Cas9 is a revolutionary gene editing technology that allows for precise, directed changes to genomic DNA. The Company has established a portfolio of therapeutic programs across a broad range of disease areas including hemoglobinopathies, oncology and rare diseases. To accelerate and expand its efforts, CRISPR Therapeutics has established strategic collaborations with leading companies including Bayer AG and Vertex Pharmaceuticals.
In its most recent quarter, total collaboration revenue was $32.3 million for the fourth quarter of 2017 compared to $2.3 million for fourth quarter of 2016, and $41.0 million for the year ended December 31, 2017, compared to $5.2 million for the year ended December 31, 2016. The increase in annual revenue is primarily attributable to deferred revenue recognized in conjunction with the execution of the Company’s collaboration agreement with Vertex.
There were a number of research expenses. R&D expenses were $20.0 million for the fourth quarter of 2017 compared to $15.6 million for the fourth quarter of 2016, and $69.8 million for the year ended December 31, 2017 compared to $42.2 million for the year ended December 31, 2016. The increase in expense was driven by greater investment in CRISPR’s lead hemoglobinopathies program partnered with Vertex, in addition to accelerating the Company’s wholly owned immuno-oncology and in vivo programs.
On top of research, general expenses were well managed. General and administrative expenses were $11.3 million for the fourth quarter of 2017 compared to $12.1 million for the fourth quarter of 2016, and $35.8 million for the year ended December 31, 2017 compared to $31.1 million for the year ended December 31, 2016. The increase in general and administrative expenses for the year was driven by increases in employee-related costs associated with our growing organization.
The company almost brokeeven Net income was $0.1 million for the fourth quarter of 2017 compared to $17.1 million for the fourth quarter of 2016, and net loss was $68.3 million for the year ended December 31, 2017 compared to $23.2 million for the year ended December 31, 2016.
Cash burn matters. Cash, cash equivalents and marketable securities as of December 31, 2017 were $239.8 million, compared to $315.5 million as of December 31, 2016, a decrease of $75.7 million, which was primarily driven by expenditures on research and development. Additionally, on January 5, 2018, CRISPR announced a follow-on offering that raised $122.6 million of net proceeds that are not reflected in year-end cash. Combined with the 2017 year-end cash balance, CRISPR Therapeutics enters 2018 with more than $360 million available to advance its portfolio.
Portfolio progress matters
The following is a series of accomplishments to be aware of.
CRISPR, together with Vertex Pharmaceuticals, has filed clinical trial applications (CTAs) in various European countries to conduct a Phase 1/2 trial of CTX001, an autologous gene-edited hematopoietic stem cell therapy for patients suffering from severe hemoglobinopathies. CRISPR has received approval for the first of these CTAs and expects to initiate clinical trials in Europe in 2018. The Phase 1/2 trial of CTX001 is designed to assess its safety and efficacy in adult transfusion-dependent β-thalassemia patients. Additionally, the Company plans to file an Investigational New Drug (IND) Application for CTX001 in SCD in the US in the first-half of 2018.
CRISPR presented new data at the American Society of Hematology (ASH) Annual Meeting in December 2017 demonstrating that its CRISPR gene-editing approach results in high editing efficiency, with >90% of the hematopoietic stem cells edited at the target site. The expression levels of fetal hemoglobin in these cells were above the level believed to be sufficient to ameliorate symptoms in patients with β-thalassemia and sickle cell disease.
CRISPR also presented in vitro and in vivo data demonstrating potent anti-tumor activity during a poster session at the Society for Immunotherapy in Cancer (SITC) 32nd Annual Meeting. The Company believes its allogeneic CAR-T cell therapies may have distinct advantages over the current generation of autologous cell therapies including greater access due to their “off-the-shelf” nature, and greater efficacy due to the homogeneity and consistency of the product. CRISPR plans to file an IND for CTX101 in the US by year-end 2018.
During a company-sponsored reception at the SITC 32nd Annual Meeting, CRISPR announced it will be advancing the next two candidates targeting B-cell maturation antigen (BCMA) and CD70. The Company believes it has the necessary capabilities in place to rapidly advance these product candidates to the clinic.
In November 2017, CRISPR entered into a collaboration with CureVac to develop novel Cas9 mRNA constructs with improved properties for gene editing applications that could include increased potency, decreased duration of expression and reduced potential for immunogenicity. The Company obtained an exclusive license to the improved constructs for use in three of their in vivo gene-editing programs in liver diseases. Additionally, CRISPR Therapeutics entered into a collaboration with StrideBio to develop AAV vectors with greater tissue specificity, and reduced immunogenicity.
CRISPR continues to recruit top talent across all functions as it evolves into a clinical-stage company. Notably, in 2017, the Company appointed Dr. Samarth Kulkarni as Chief Executive Officer and added key executives in positions including Head of Research and Development, Chief Financial Officer and General Counsel, each of whom bring an extensive track-record of success and leadership in biopharma.
All things considered
All things considered, CRISPR is moving in a very positive direction. While it is a speculative buy, we think there is a lot of upside potential.
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