The stock market’s wonderfully diverse, with almost limitless options for a Stocks and Shares ISA. For intrepid investors willing to swing for the fences, here are two high-risk, high-reward ideas to consider.
Gene-editing
First up is biotech firm Crispr Therapeutics (NASDAQ: CRSP) which pioneered the Nobel Prize–winning CRISPR/Cas9 technology to edit genes.
A year ago, it had its first treatment, Casgevy, approved for sickle cell disease and beta-thalassemia, rare blood disorders that are often debilitating for sufferers.
Crispr Therapeutics and its partner Vertex Pharmaceuticals have started to collect cells from 50 patients. These will be edited outside the body and reinfused into the patient with the aim of curing them. The NHS is currently rolling out Casgevy.
Looking ahead, the two companies have identified some 58,000 patients in the US, Europe and the Middle East. At a cost of around $2.2m a patient, the revenue opportunity over the next few years could be in the billions (Crispr will get 40% of sales with the rest going to Vertex).
The firm also has a promising gene-editing candidate for blood cancers in the clinic, as well as a potentially revolutionary treatment for type 1 diabetes that aims to restore insulin production.
Naturally, the biotech’s vulnerable to setbacks in these clinical trials. And given the firm’s lack of revenue, never mind profits, the negative impact on the share price would likely be sizeable.
Nevertheless, the company had $1.9bn in cash toward the end of last year, which is enough to fund its exciting pipeline of treatments.
With the share price down 39% over one year, and the firm sporting a modest $1.5bn enterprise value, I think Crispr Therapeutics stock is worth considering.
Ready for lift-off?
Next up is Archer Aviation (NYSE: ACHR), which is racing to commercialise electric vertical takeoff and landing (eVTOL) aircraft. These take off vertically like helicopters but are near-silent and far greener, making them perfect for congested urban cities (Los Angeles, New York, Tokyo, Abu Dhabi, etc).
Archer intends to launch an Uber-like air taxi service and also sell EV aircraft directly to third-party customers. For example, it recently entered a strategic partnership with Anduril Industries to develop hybrid aircraft for military applications (reconnaissance, for example, given how quiet they are).
Now, the thing here is that the company still hasn’t had its aircraft, called Midnight, fully approved by the Federal Aviation Administration (FAA). It expects to achieve this later in 2025, but there could be regulatory delays (or worse). So this stock’s highly speculative at this stage.
However, there are a few things I like here. First, Archer has nearly completed phase three of the FAA’s four-phase certification process, while making progress through the final stage. And it’s on course to launch a commercial air taxi service in Abu Dhabi later this year.
Next, it has just finished construction of a high-volume, 400,000 sq ft manufacturing facility. With backing from car giant Stellantis, it intends to scale up to 650 aircraft annually by 2030. Archer’s currently well-capitalised and its order book now exceeds $6bn.
Finally, Morgan Stanley estimates the eVTOL market could top $1trn in 15 years! Archer Aviation’s market-cap today is $4.3bn. At $8, I think the stock’s worth considering for adventurous investors.
