The Food and Drug Administration appears likely to approve Crispr Therapeutics' gene-editing approach to sickle cell disease, analysts said Wednesday as CRSP stock gapped higher.
The bullish sentiment follows a "relatively benign" FDA advisory committee on Tuesday, Mizuho Securities analyst Salim Syed said in a report. Panelists discussed the possibility of unintended edits to patients' genomes and how to screen for those.
But there were few questions about the effectiveness of Crispr's drug exa-cel, developed in partnership with Vertex Pharmaceuticals. Patients who've received the one-time infusion have had drastic decreases in painful episodes known as vaso-occlusive crises, or VOCs.
"One thing is becoming abundantly clear," Syed said. "Patients are consistently talking about the pain of sickle cell disease (and arguing for approval). These patients seem more concerned about their quality of life than any off-target editing risk."
In response, CRSP stock surged 12.4% to close at 43.75 on today's stock market. Vertex stock lifted 2% to 369.33.
CRSP Stock: 'Highly Theoretical' Discussion
In sickle cell disease, patients' bodies don't form proper hemoglobin, a protein necessary to carry oxygen throughout the body. Crispr's drug helps them make new hemoglobin.
The discussion Tuesday proved "highly theoretical," Needham analyst Gil Blum said in a report to clients. It's possible the gene-editing approach could lead to unintended genetic edits in patients' bodies. But a committee member, Dr. Gil Wolfe, cautioned against losing the forest for the trees. Wolfe is a neurology professor at the University at Buffalo.
"We believe Dr. Wolfe summarized it nicely when he said, 'careful not to let the perfect be the enemy of the good,' " Blum said. "In other words, there can always theoretically be more testing done, but that doesn't mean that exa-cel shouldn't be approved based on the compelling data it has generated thus far."
Blum kept his buy rating and 88 price target on CRSP stock.
Crispr promised to follow patients for 15 years following treatment. The company said it will take patients' cells before and after treatment to monitor for off-target genetic edits.
Next Up: A Potential Approval
The next binary event for CRSP stock will be the FDA's decision, expected Dec. 8.
"We expect approval as the most likely outcome, with debate consequently shifting to commercial launch expectations — the crux of the long-term bull/bear debate," Leerink Partners analyst Mani Foroohar said in a report.
He has an outperform rating on Crispr shares.
But uptake will initially be limited to the most severe patients, RBC Capital Markets analyst said in a report to clients.
Further, the infrastructure will face capacity restrictions. Before receiving the gene-editing drug, patients must first receive a drug called busulfan. This drug essentially obliterates all their bone marrow. It's the same regimen patients undergoing a stem cell transplant receive.
Patients who receive busulfan can become infertile. Preserving eggs and sperm is an expensive, out-of-pocket cost in most states, RBC analysts said. For that reason, they expect some patients to opt for chronic treatments over one-time gene-editing drugs.
They have sector perform ratings on CRSP stock and Vertex shares.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
