We recently compiled a list of the Top 11 CRISPR Stocks to Invest In. In this article, we are going to take a look at where Prime Medicine, Inc. (NASDAQ:PRME) stands against the other CRISPR stocks.
The pharmaceutical industry is buzzing with innovation, driven by the need for new treatments, tackling unmet medical challenges, and leveraging cutting-edge technologies like pharmacogenomics, digital therapeutics, and artificial intelligence. Among the most exciting breakthroughs are gene therapy and gene editing, with CRISPR-Cas9 leading the charge. This remarkable tool, inspired by bacteria’s natural defenses, acts like precise genetic scissors—faster, cheaper, and more accurate than other genome-editing methods.
Back in 2014, CRISPR and its associated Cas proteins were mostly limited to academic research, generating a lot of excitement but seeming far from real-world applications. Just six years later, after earning a Nobel Prize, CRISPR began to make its way into over 20 clinical trials. The COVID-19 pandemic further demonstrated its potential, with CRISPR-based tests delivering quick and accurate virus detection, while experimental treatments explored its use against the virus—showcasing the technology’s incredible flexibility in tackling public health crises.
The CRISPR technology market is poised for explosive growth. Coherent Market Insights estimates it will be worth $3.64 billion in 2024 and climb to more than $12.46 billion by 2031, growing at an impressive annual rate of 19.2%. Cell and gene therapies are game-changing for treating certain cancers and rare diseases. As of 2024, there are 38 FDA-approved cell and gene therapy products, including six CAR-T cell therapies targeting cancers like lymphoma, leukemia, and multiple myeloma. Several gene therapies are also available for rare genetic disorders, such as spinal muscular atrophy and Duchenne muscular dystrophy. The industry’s focus has evolved from simply proving these therapies work to optimizing their effectiveness, minimizing side effects, and broadening their applications.
However, these therapies can come with eye-watering price tags—ranging from $400,000 to $2 million per dose. Although the sector has faced tough investment conditions since its boom in 2020 and 2021, there are signs of a rebound. Investments in the first half of 2024 reached $10.9 billion, surpassing 2019’s $9.8 billion, though still shy of the record $19.9 billion and $22.7 billion seen in 2020 and 2021. Funding dipped to $12.6 billion in 2022 and $11.7 billion in 2023. But there’s hope: Morgan Stanley suggests that Federal Reserve interest rate cuts could breathe new life into riskier assets like cell and gene therapies, aligning with a broader recovery in biotech.
The regulatory landscape for gene and regenerative therapies has also come a long way. In the U.S., the FDA has created clearer pathways for development, aided by the Regenerative Medicine Advanced Therapy (RMAT) designation, which speeds up review times and offers additional support to developers. Similarly, Europe has made strides with its guidelines for Advanced Therapy Medicinal Products (ATMPs). In 2017, the European Commission introduced a joint action plan to simplify processes for companies. While there’s still progress to be made, the push toward harmonized international regulations has made it easier for companies to secure approvals across multiple regions.
Our Methodology
To identify the top 11 CRISPR stocks to invest in, we started by analyzing companies in the sector using ETF holdings and media coverage. We then narrowed down the list by focusing on top-performing stocks with the highest number of hedge fund investors, as tracked by Insider Monkey’s database of 900 hedge funds at the end of Q3 2024.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A scientist examining a microchip and circuit board in a hi-tech lab.
Prime Medicine, Inc. (NASDAQ:PRME)
Number of Hedge Fund Holders: 21
Prime Medicine, Inc. (NASDAQ:PRME) is a clinical-stage biotech company at the forefront of gene editing, specializing in Prime Editing-based therapies. Its proprietary Prime Editing platform offers a groundbreaking approach to gene therapy, enabling precise DNA editing, correction, insertion, and deletion. This technology has the potential to target a broader range of genes and tissues than conventional editing methods. A standout feature is PASSIGE, a proprietary tool that facilitates the efficient insertion of larger genes into DNA, positioning the company uniquely in the competitive gene-editing landscape and paving the way for treatments of complex genetic disorders.
The company’s lead candidate, PM359, is an ex-vivo hematopoietic stem cell-based therapy designed to treat Chronic Granulomatous Disease (CGD). Analysts view this program as relatively low-risk, providing a strong foundation for further clinical development. Prime Medicine, Inc. (NASDAQ:PRME) has also secured a high-profile collaboration with Bristol Myers Squibb, including a $110 million upfront payment, to apply its Prime Editing technology to develop next-generation T-cell therapies for immunology and oncology.
On December 10, JMP Securities initiated coverage of Prime Medicine, Inc. (NASDAQ:PRME) with a Market Outperform rating and a $10 price target, suggesting significant upside from its current price of $3.22. The firm highlighted the company as a leader in Prime Editing, emphasizing the platform’s ability to address genetic targets beyond the reach of earlier gene-editing technologies.
Overall, PRME ranks 8th on our list of the top CRISPR stocks to invest in. While we acknowledge the potential of PRME as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PRME but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.