The rising demand for precision medicine, given the aging population and increased life-threatening disease diagnoses, is boosting the demand for genomics. The industry’s growth is driven by rapid technological advancements, such as Polymerase Chain Reaction (PCR), Sanger Sequencing and Next-generation Sequencing (NGS), development in non-invasive cancer screening-based research, and the growing need for rapid clinical diagnosis.
According to a report by Reports and Data, the global genomics market is projected to reach $128.75 billion by 2030, growing at a CAGR of 19%. The growing investments in R&D activities of genomics by the government and various biopharmaceutical companies should fuel the market’s revenue growth. However, due to the ongoing macro headwinds, the genomics stocks were hard hit due to the steep selloff. The recent market downturn further provides an excellent opportunity for long-term investors to add fundamentally sound stocks to their portfolios at a discount.
Given the industry’s promising growth prospects, Wall Street analysts expect genomics stocks Invitae Corporation (NVTA), Editas Medicine, Inc. (EDIT), Intellia Therapeutics, Inc. (NTLA), and CRISPR Therapeutics AG (CRSP) to surge significantly in the coming months.
Invitae Corporation (NVTA)
NVTA is a medical genetics company that improves healthcare internationally by integrating genetic information into mainstream medicine. The company provides digital health solutions and genetic tests in clinical areas such as hereditary cancer, neurology, cardiology, metabolic conditions, oncology, and rare diseases. It serves patients, healthcare providers, and biopharma companies.
On May 19, NVTA launched the expanded Invitae Pharmacogenomics (PGx) Panel, including the specialized Invitae Pharmacogenomics Mental Health Panel and access to a clinical decision support tool (CDST). The new 38-gene testing panel and clinical support tool analyze patients’ genetics and co-medications for their impact on drug and dose personalization.
On April 4, NVTA introduced the first comprehensive genetic test suite for Neurodevelopmental Disorders (NDD). “The NDD package provides genetic answers in a timely fashion, with a goal of informing physicians and parents, informing care decisions, and developing appropriate treatment plans for patients,” said Robert Nussbaum, M.D., NVTA’s CEO.
In the fiscal 2022 first quarter ended March 31, 2022, NVTA's revenue increased 19.4% year-over-year to $123.69 million. Its non-GAAP gross profit grew 11.7% year-over-year to $45.21 million. As of March 31, 2022, the company's cash and cash equivalents and current assets came in at $325.33 million and $1.03 billion, respectively.
The $163.88 million consensus revenue estimate for the fiscal 2022 third quarter, ending September 2022, represents a 43.3% improvement from the same period last year. Analysts expect NVTA’s EPS for the same quarter to increase 12.1% year-over-year.
The stock declined 45.3% over the past month and closed yesterday's trading session at $2.34.
Of the seven Wall Street analysts that rated NVTA, three rated it Buy, three rated it Hold, and one rated it Sell. The 12-month median price target of $10.14 indicates a 334.3% potential upside. The price targets range from a low of $2.50 to a high of $20.00.
Editas Medicine, Inc. (EDIT)
EDIT is a clinical-stage genome editing company that focuses on developing transformative genomic medicines to treat a range of serious diseases. The company has developed a gene-editing platform based on Clustered, Regularly Interspaced Short Palindromic Repeats (CRISPR) technology. Its gene-editing medicine programs include EDIT-101, EDIT-102, EDIT-103, EDIT-301, and EDIT-202.
This month, EDIT and Immatics N.V. (IMTX), a clinical-stage biopharmaceutical company that discovers and develops T cell-redirecting cancer immunotherapies, entered into a strategic research collaboration and licensing agreement to combine gamma-delta T cell adoptive cell therapies and gene-editing for the treatment of cancer. This collaboration is expected to accelerate the company’s growth.
On May 13, EDIT received FDA Orphan Drug Designation for its EDIT-301, an investigational gene-editing medicine for treating beta-thalassemia. “Preparations to initiate the Phase 1/2 clinical trial of EDIT-301, a potentially transformative medicine for people living with beta-thalassemia, are underway, and we look forward to dosing the first patient in the clinical trial this year,” said James C. Mullen, EDIT’s Chairman, President, and CEO.
EDIT's collaboration and other research and development revenues increased 4.2% year-over-year to $6.77 million in the fiscal 2022 first quarter ended March 31, 2022. Its total other income rose 51.6% year-over-year to $235,000. In addition, the company’s cash, cash equivalents, and marketable securities stood at $566.41 million as of March 31, 2022.
The consensus revenue estimate of $4.29 million for the fiscal 2022 second quarter, ending June 2022, represents an increase of 1,032.1% from the prior-year period. The consensus EPS estimate for the current quarter indicates a marginal year-over-year rise. Furthermore, the company has surpassed the consensus revenue estimates in three of the trailing four quarters.
Shares of EDIT plunged 11.3% over the past month and 29.4% over the past three months to close yesterday's trading session at $10.53.
Of the 12 Wall Street analysts that rated EDIT, four rated it Buy, five rated it Hold, and three rated it Sell. The 12-month median price target of $22.27 indicates a 111.1% potential upside. The price targets range from a low of $8.00 to a high of $40.00.
Intellia Therapeutics, Inc. (NTLA)
NTLA is a genome editing company. The company focuses on developing therapeutics using Clustered, Regularly Interspaced Short Palindromic Repeats/CRISPR associated nine technologies. NTLA's lead in vivo candidates includes NTLA-2001 to treat transthyretin amyloidosis and NTLA-2022 to treat hereditary angioedema. Its ex vivo pipeline includes NTLA-5001 to treat acute myeloid leukemia.
In March, NTLA announced that the first patient had been dosed with NTLA-5001, the company's ex vivo CRISPR/Cas9 genome editing candidate for treating acute myeloid leukemia (AML). This might promote the company's strategic plans to advance its investigational engineered cell therapy to treat people living with an aggressive cancer of the blood and bone marrow.
NTLA's collaboration revenue increased 74.6% year-over-year to $11.25 million in the fiscal 2022 first quarter ended March 31, 2022. Its interest income grew 145.5% year-over-year to $540,000. As of March 31, 2022, the company's cash, cash equivalents, and marketable securities came in at $994.74 million.
Analysts expect NTLA’s revenue to grow 45% year-over-year to $9.50 million for its fiscal 2022 second quarter, ending June 2022. The company has topped the consensus EPS estimates in each of the trailing four quarters.
The stock slumped 65.4% year-to-date and 53.8% over the past year. It closed yesterday's trading session at $40.93.
Of the 12 Wall Street analysts that rated NTLA, 11 rated it Buy, and one rated it Hold. The 12-month median price target of $108.00 indicates a 163.7% potential upside. The price targets range from a low of $58.00 to a high of $155.00.
CRISPR Therapeutics AG (CRSP)
Headquartered in Zug, Switzerland, CRSP is a gene-editing company that focuses on developing gene-based medicines using its proprietary Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR) platform. It has a portfolio of therapeutic programs across various disease areas. The company has strategic partnerships with Bayer Healthcare LLC, Vertex Pharmaceuticals Incorporated, ViaCyte, Inc., and Nkarta, Inc.
On June 11, CRSP presented positive results from the company’s ongoing Phase 1 COBALT™-LYM trial analyzing the safety and efficiency of CTX130™, allogeneic CAR-T cell therapy for treating solid tumors and certain hematologic malignancies at the 2022 European Hematology Association (EHA) Congress. The positive data from the CTX130 trial demonstrate the potential of cell therapies in patients with difficult-to-treat T cell lymphomas.
In February, CRSP and ViaCyte, Inc., a clinical-stage regenerative medicine company, announced that the first patient got dozed in Phase 1 clinical trial of VCTX210 to treat type 1 diabetes (T1D). VCTX210 is an investigational, allogeneic, stem cell-derived product developed by CRSP's gene-editing technology in collaboration with ViaCyte's proprietary stem cell capabilities.
In the fiscal 2022 first quarter ended March 31, 2022, CRSP's total revenue increased 74.4% year-over-year to $940,000. The company’s cash and total assets amounted to $680.91 million and 2.61 billion, respectively, as of March 31, 2022.
The $207.77 million consensus revenue estimate for the fiscal year 2023, ending December 2023, represents a 176.1% improvement from the previous year. Analysts expect CRSP’s EPS for the next year to increase 13% year-over-year. Also, the company has an impressive earnings history as it has topped the consensus EPS estimates in three of the trailing four quarters.
The stock declined 20.6% over the past six months and closed yesterday's trading session at $62.66.
Of the 16 Wall Street analysts that rated CRSP, 11 rated it Buy, and five rated it Hold. The 12-month median price target of $96.50 indicates a 53.9% potential upside. The price targets range from a low of $46.00 to a high of $150.00.
NVTA shares were trading at $2.13 per share on Thursday afternoon, down $0.21 (-8.97%). Year-to-date, NVTA has declined -86.05%, versus a -22.56% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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