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Portfolio Manager Thinks Gene-Editing Stocks Could Outperform Tesla

GuruFocus.com
·3 min read

- By Barry Cohen

A leading portfolio manager recently told Bloomberg Television that gene-editing companies may turn out to be better investment opportunities than Tesla Inc. (NASDAQ:TSLA).

Catherine Wood, the founder of ARK Investment Management and an early investor in the electric car company, said that investing in genomics and gene-editing stocks should be an even better longer-term play than Tesla because the technology has the potential to cure diseases. Three of her favorites in the field are Editas Medicine Inc. (NASDAQ:EDIT), CRISPR Therapeutics (NASDAQ:CRSP) and Intellia Therapeutics (NASDAQ:NTLA), which together own the majority of gene-editing technology intellectual property.


Wood has been right on the mark. This week Intellia hit an all-time high of more than $86 as the Cambridge, Massachusetts-based company announced it will file investigational new drug applications to begin clinical studies on its two CRISPR-based candidates, one for the treatment of a type of leukemia and the other for a hereditary swelling disorder.

If approved, the INDs will allow Intellia to begin clinical studies on the candidates. The company's lead pipeline candidate has just begun human tests. It is a potentially curative single-course therapy to treat a rare inherited disease, which cuts patients' life expectancy to seven to 12 years after diagnosis, according to the National Institutes of Health.

Editas and CRISPR rode the wave of investor enthusiasm over the Intellia news, as both climbed to all-time highs. Editas, a Cambridge neighbor of Intellia, traded just under $100 before closing the week at $90.58. The company's stock has tripled since early November, giving it a market cap of more than $5.6 billion.

Portfolio Manager Thinks Gene-Editing Stocks Could Outperform Tesla
Portfolio Manager Thinks Gene-Editing Stocks Could Outperform Tesla

Meanwhile, shares of CRISPR closed at $194 Friday after topping a best-ever $210. The Swiss company's stock is up 220% in the past year, giving it a market cap a shade under $14 billion.

CRISPR (the technology, not the company) is an acronym for clustered regularly interspaced short palindromic repeats. The technology can selectively delete, modify or correct a disease-causing abnormality in a specific deoxyribonucleic acid segment.

The global CRISPR and CRISPR-associated genes market size is expected to reach nearly $5 billion by 2027, growing at a compound rate of 16.6% from 2020 to 2027, according to a new report by Grand View Research Inc. The market will be driven by the increased use of CRISPR technology in epigenetics, therapeutics, human germline editing, plant genome editing and other biotech fields.

Investors who want to have a position in the field but prefer to spread the risk might consider the ARK Genomic Revolution ETF (ARKG). It, too, shot to a historic high on Friday, topping out at just more than $109 before ending the day at $105.86. The EFT's top 10 holdings include Pacific Biosciences of California Inc. (NASDAQ:PACB), Fate Therapeutics Inc. (NASDAQ:FATE), Invitae Corp. (NYSE:NVTA), Iovance Biotherapeutics Inc. (NASDAQ:IOVA) and Exact Sciences Corp. (NASDAQ:EXAS).

Disclosure: The author has no positions in any of the companies mentioned in this article.

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This article first appeared on GuruFocus.