Could CRISPR Therapeutics Become the Next Vertex Pharmaceuticals?

Vertex Pharmaceuticals (NASDAQ: VRTX) is a great example of biotech success. The company has built a cystic fibrosis (CF) empire, bringing in billions of dollars in revenue annually, and now is even expanding into other promising billion-dollar opportunities. It recently won approval for a non-opioid pain treatment that could be a game-changer for both patients and the company down the road.

Of course, Vertex's success didn't happen overnight -- and the company even had to quickly shift focus after its initial drug, a hepatitis C treatment, didn't deliver lasting growth. Vertex then bet heavily on its CF research and scored a win: The company now has five commercialized CF treatments, including one approved early this year.

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CRISPR Therapeutics (NASDAQ: CRSP) is a biotech that generally tackles specialties different from those of Vertex, though it has partnered with Vertex on certain programs. For example, using CRISPR Therapeutics' gene-editing platform, the two companies brought blood-disorders treatment Casgevy to market a little over a year ago.

So these two players know each other well, though CRISPR Therapeutics is in the earlier stages of its product commercialization journey. Could it catch up to its bigger biotech peer, and even become the next Vertex in the eyes of investors? Let's find out.

Image source: Getty Images.

Fixing genes involved in disease

Let's start by taking a look at the CRISPR Therapeutics story so far. The company focuses on CRISPR gene editing, a technique that repairs faulty genes involved in disease; it does this by cutting DNA at a specific location and allowing a repair process to happen.

As mentioned, this biotech and partner Vertex used the technology in Casgevy and won the first-ever regulatory approval of a treatment based on CRISPR gene editing. This shows that regulators recognize the technique's potential, and may be amenable to approving other treatments involving it in the future. And this is particularly important for CRISPR Therapeutics, since its pipeline revolves around CRISPR gene editing, with several compelling candidates for indications from type 1 diabetes to cardiovascular disease.

Trial data results and a product rollout

This year could be an important one for the company for a couple of different reasons. First, it expects to deliver updates across clinical programs, and if these are positive, they could act as a catalyst for share-price gains. The company says it should release updates on CTX112 in oncology and autoimmune diseases by the middle of this year, and updates on the CTX131 program in solid tumors and hematologic malignancies this year as well.

Second, CRISPR Therapeutics continues to roll out Casgevy, a product that is slow to launch as it involves a long treatment process -- steps include collection of blood stem cells, for example, and the return of edited cells back to the patient. The months-long process, which takes place at specific authorized treatment centers, means it will take time for the company to start seeing significant revenue flow in from Casgevy. As of the end of last year, more than 50 patients had cells collected for the treatment, so in the coming quarters we could start to see a path to revenue growth.

The path to multiple products

Now, let's consider the comparison between CRISPR Therapeutics and Vertex. Both companies are innovators, using cutting-edge technology to treat serious diseases. And both companies have won regulatory approval, which could be seen as a vote of confidence in their technologies. Today, CRISPR Therapeutics has only reached that approval finish line once, while Vertex has passed it multiple times.

However, if CRISPR Therapeutics continues to deliver positive clinical trial results, it could -- like Vertex -- become a company with multiple products on the market. This takes time, as the drug development process requires years of testing, and regulatory review generally spans several months. All of this means that if investors are looking for the next Vertex, they can consider CRISPR Therapeutics, but they should be ready to buy the stock and hold on for a number of years. As I said earlier, Vertex also didn't become a biotech giant in a day.

Today, at a market value of $2.6 billion, CRISPR Therapeutics may seem light-years away from Vertex, valued at more than $120 billion. But it's important to remember that back in 2010 before Vertex's numerous product approvals, the company's market cap was only about $7.5 billion. So, if CRISPR Therapeutics is able to launch several products in the years to come, it could see its market value soar and become the next Vertex -- and that would be great news for investors who got in early on this potential biotech winner.

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Adria Cimino has positions in Vertex Pharmaceuticals. The Motley Fool has positions in and recommends CRISPR Therapeutics and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.