Goldman Sachs Steps To The Sidelines On Crispr Therapeutics

Crispr Therapeutics AG CRSP has surged 24 percent since the start of the year, but one analyst sees little more room to run.

The Rating

Goldman Sachs analyst Salveen Richter downgraded Crispr to Neutral and cut his price target from $78 to $40.

The Thesis

Richter considers Crispr a “pioneer” in CRISPR and Cas9 gene editing, but three circumstances keep her sidelined.

To start, bluebird bio Inc BLUE has set a high clinical bar and established a first-mover advantage in sickle cell disease and transfusion-dependent beta-thalassemia through its LentiGlobin platform. It expects European approval for the latter indication in 2019 and is in the pivotal stage of sickle-cell studies.

“While we are cognizant of the two different approaches to restore functional hemoglobin levels, we believe CTX001 will need to achieve 80-90 percent transfusion-independence in order to be competitive in the TDT marketplace,” Richter said of Crispr’s candidate.

Meanwhile, competition continues to emerge for allogeneic CAR-T cancer therapies.

Finally, Crispr’s two key programs — CTX001 in rare blood disorders and CTX110 in blood cancers — see no catalysts until the end of 2019.

Given the risks and distance of progress, the analyst sees little acquisition interest for Crispr.

“As a result, we remove our M&A ranking of ‘1’ as we see limited optionality on this front in the near term given in-human proof-of-concept data and platform derisking is likely key for this novel technology,” Richter wrote in the note.

Price Action

At time of publication, shares were down 3.5 percent at $32.02.

Related Links:

The Daily Biotech Pulse: Clinical Hold Lifted Off Crispr's Gene-Edited Therapy, Endra To Offer Shares

Intellia Confirms Crispr Risk Irrelevant To Its Program, With No Adjustments Needed