CRISPR Therapeutics (CRSP) Shares Fall 11% on Weak Earnings, Free Competing Therapy, and CEO Share Sale

TLDR

• CRSP experienced a significant decline, dropping as much as 11.59% on Friday and reaching a low of $51.21.
• The company’s first-quarter earnings significantly missed expectations, with an EPS of -$1.37 compared to the -$1.15 anticipated. Revenue also fell short, coming in at $0.86 million against an expected $4.72 million, representing a 97.8% decrease year-over-year.
• Regeneron’s recently approved gene therapy, Otarmeni, will be provided at no cost to eligible U.S. patients, raising concerns about potential pricing pressure on CRISPR Therapeutics’ Casgevy.
• CEO Samarth Kulkarni sold 10,349 shares on March 16, and other company insiders have collectively sold 51,828 shares in the past three months.
• Analysts maintain a consensus rating of “Moderate Buy” with an average price target of $64.53.

(SeaPRwire) –   CRISPR Therapeutics ($CRSP) faced a challenging Friday, with its stock price falling by as much as 11.59% to a low of $51.21. The stock closed around $51.04, down from its previous close of $55.18. Trading volume was approximately 1.36 million shares, which was about 27% below the average session volume.

CRISPR Therapeutics AG, CRSP

The stock’s decline was attributed to a combination of a disappointing earnings report and a competitive development from Regeneron.

Regarding earnings, CRISPR reported an EPS of -$1.37 for the quarter, which was lower than the consensus estimate of -$1.15. Revenue for the period was only $0.86 million, significantly below the expected $4.72 million. This represents a substantial 97.8% year-over-year decrease and surprised investors.

The company’s return on equity is currently negative at -26.31%, and its net margin is also deeply negative. Analysts are projecting a full-year EPS of -$4.93.

Regeneron’s Free Gene Therapy Adds Pressure

The competitive landscape shifted with Regeneron’s announcement. The company has received approval for Otarmeni, a gene therapy that it intends to offer free of charge to eligible patients in the U.S. This move directly impacts the broader gene-editing market.

CRISPR’s leading therapy, Casgevy, developed in partnership with Vertex Pharmaceuticals, has a list price of $2.2 million. The concern is that Regeneron’s free offering could prompt discussions about pricing across the industry, making it more difficult to justify the costs of expensive, one-time treatments.

Casgevy marked a significant milestone as the first CRISPR-based therapy approved by the FDA. However, its commercial adoption has been slow, and Regeneron’s news introduces further uncertainty regarding its revenue trajectory.

Insider Selling Adds to the Unease

Insider trading activity has also contributed to a less optimistic sentiment. On March 16, CEO Samarth Kulkarni sold 10,349 shares at an average price of $48.26, reducing his ownership stake by approximately 4%. General Counsel James Kasinger also sold 3,450 shares on the same day.

In the last three months, insiders have sold a total of 51,828 shares, valued at around $2.58 million. Insiders currently hold a 4.30% stake in the company.

While such sales are not uncommon for biotech executives managing equity compensation, they add to the cautious outlook surrounding the stock.

Analyst ratings present a mixed but generally positive view. Bank of America has a Buy rating with a $89 price target. Needham also rates the stock as Buy with an $82 target. TD Cowen maintains a Hold rating and a $45 target. Citizens JMP has an Outperform rating with an $80 target. The consensus rating is Moderate Buy, with an average price target of $64.53, which is considerably higher than the current trading price.

The stock’s 50-day moving average is $52.68, and its 200-day moving average is $55.70. The market capitalization is approximately $4.90 billion, with a beta of 1.80.

Currently, CRSP is trading around $51, remaining below both its 50-day and 200-day moving averages.