After sliding 75%, this fascinating growth stock could be in bargain basement territory

This growth stock reached dizzying heights during the pandemic, but came down to earth with a bump. Is it a bargain or something to avoid?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I’ve been investing in a growth stock called CRISPR Therapeutics (NASDAQ:CRSP) for a little over 18 months, and it’s fair to say, it’s been quite a ride. Having been up almost 100%, I’m now back where I started.

The gene-editing pioneer is currently trading for $45 a share, and that’s down from $200 a share in late 2021.

So, is this stock really in bargain basement territory?

Should you invest £1,000 in Crispr Therapeutics right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Crispr Therapeutics made the list?

See the 6 stocks

Created with Highcharts 11.4.3CRISPR Therapeutics PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

A true pioneer

CRISPR therapeutics uses a revolutionary gene-editing technology called (no surprise) CRISPR — clustered regularly interspaced short palindromic repeats — that allows precise modification of DNA to treat genetic diseases.

The process actually takes place naturally in bacteria, and the two scientists who discovered it recently received a Nobel Prize in Chemistry.

It’s a fascinating technology that has two active parts: a guide RNA to target specific genes for disruption, deletion, correction or insertion, and the Cas9 enzyme, which acts as “molecular scissors” to cut the DNA.

A revolution in medicine

Thousands of scientists around the world believe this technology will revolutionise survival rates for various diseases and conditions, several of which have previously been very hard to treat.

And this is demonstrated CRISPR Therapeutics’s first approved therapy, CASGEVY, which treats people suffering from sickle cell disease (SCD) and transfusion-dependent beta-thalassemia.

Before CRISPR, the treatment was typically regular transfusions to replace irregular blood cells with donor ones.

The potential is clearly huge. While CRISPR and its peers have focused on these blood disorders, the technology shows promise for treating a huge range of disease caused by genetic mutations, including cancers.

The value proposition

Most of the analysis I’ve seen concerning the firm has focused on its CASGEVY therapy, which is 60% owned by pharma giant Vertex and is slowly being rolled out in the US. At the last update, which was approximately eight months after regulatory approval was granted, there were 20 enrolled patients.

That might sound like a slow start, but analysts expect this figure to grow substantially over the next couple of years, with more than 100,000 eligible patients globally.

However, there are several things to consider.

Firstly, the treatment costs $2.2m. That’s below the average cost of a lifetime of transfusions, and substantially cheaper than Bluebird Bio‘s therapy that gained approval at the same time and came with a safety notice. Nonetheless, the price tag could result in slower payer approval times.

It’s also the case that CASGEVY puts a lot of pressure on the body. Following cell collection, patients have to wait months for their cells to be edited before undergoing chemotherapy to kill existing stem cells.

The bottom line

Wall Street currently says the stock is undervalued by 64% — that suggests bargain basement territory.

However, I accept that this is one of my more speculative investments because I’m very aware that the technology is still in its early stages, with many unknowns regarding long-term safety and efficacy.

So, why did I invest?

I wanted exposure to this revolutionary technology that will hopefully change lives for the better.

After much research, I decided that CRISPR Therapeutics, with its advanced pipeline and commercialisation prospects, was the best pick.

It currently represents around 3% of my portfolio, reflecting my hopes for the company, but also my acceptance that things don’t always go to plan.

But what does the head of The Motley Fool’s investing team think?

Should you invest £1,000 in Crispr Therapeutics right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Crispr Therapeutics made the list?

See the 6 stocks

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James Fox has positions in CRISPR Therapeutics. The Motley Fool UK has recommended CRISPR Therapeutics and Vertex Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Dividend Shares

How a stock market crash could boost investors’ passive income by over 40%

Jon Smith explains how a continued fall in the stock market isn't always a bad thing, especially when it comes…

Read more »

Investing Articles

If an investor put £10k into Greggs shares one month ago, here’s what they’d have today

Greggs shares have had a tough year but Harvey Jones says they're notably cheaper as a result, while the dividend…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

The Phoenix share price jumps 7.5% on today’s results, but still yields a stunning 9.4%!

Harvey Jones put his faith in the Phoenix share price and this morning was rewarded with a 7.5% jump on…

Read more »

Investing Articles

What’s been going on with the Barclays share price?

The rising Barclays share price reflects confidence in management’s strategy to improve business performance and enhance shareholder returns.

Read more »

Investing Articles

Prediction: in 1 year, the IAG share price could reach as high as…

The IAG share price has almost doubled in the last 12 months, but can this momentum continue in 2025? Zaven…

Read more »

Investing Articles

Prediction: in 12 months, here’s where the Glencore share price could be…

The performance of Glencore’s share price has been lacklustre, to say the least. But could all that change over the…

Read more »

Investing Articles

See how much an investor needs in their ISA to earn a £499 monthly second income

Harvey Jones crunches the numbers to show how it's possible to build a long-term second income by investing in a…

Read more »

Investing Articles

I’m considering buying more of this struggling FTSE 100 stock

This FTSE 100 stock hasn't exactly set our writer's portfolio on fire during the time he's owned it. But Paul…

Read more »