Genetics is one of the most promising areas where companies are pouring billions of dollars in R&D to find breakthrough technologies that will finally enable the mankind to treat genetic diseases. However, despite several years of research the industry is yet to see a breakthrough solution that would solve the age-old problem regarding the delivery of genetic treatments. However, in a latest report, Bloomberg said that a new company called Aera Therapeutics might have come up with a solution that could solve the delivery problem in the genetic medicines industry. The Massachusetts-based company uses protein nanoparticle (PNP) delivery platform. While still in its early stage, if successful, the technology could usher in a revolution in the industry that is thriving.
Reports suggest that the global genome editing market size is expected to reach about $19.4 billion by 2028. The market is expected to record a CAGR of about 23% from 2021 through 2028. The industry is dominated by companies using the CRISPR/Cas9 technology for gene editing and related solutions.
Ambitious investor Cathie Wood was perhaps one of the first individuals who brought the often-complex and scientific world of gene editing into the mainstream and urged investors to benefit from the high-growth industry. While some have criticized Cathie Wood of overstating or exaggerating the potential of the industry without actually understanding the underlying concepts of the gene editing world, the fact remains that the gene editing companies Cathie Wood has invested in remain in the limelight and have received huge funding in addition to posting promising results. For example, in September 2022, Intellia Therapeutics Inc, in which Cathie Wood has a major stake, posted strong results for its Crispr gene-editing treatments. The company’s treatment significantly reduced levels of a protein that causes periodic attacks of swelling in six patients with a rare genetic disease called hereditary angioedema, or HAE.
In a separate study building on previously released trial data, Intellia Therapeutics Inc (NASDAQ:NTLA)’s treatment NTLA-2001 reduced a disease-causing protein by more than 90% in 12 people with transthyretin-mediated amyloidosis cardiomyopathy, or ATTR-CM, a genetic disease that can lead to heart failure.
Talking to CNBC, Cathie Wood in December 2021 said that gene editing companies like Intellia Therapeutics Inc (NASDAQ:NTLA), Crispr Therapeutics AG (NASDAQ:CRSP) and Editas Medicine Inc (NASDAQ:EDIT) represent a “trillion dollar plus opportunity.”
Cathie Wood’s hedge fund remains extremely bullish on the gene editing space. In its Big Ideas 2023 report, ARK mentioned its bullish thesis on the “Precision Therapies” sector, which aims to target the root cause of diseases instead of just the symptoms.
“Rapid advances in technologies like artificial intelligence (AI), DNA and RNA sequencing, CRISPR gene editing, and laboratory automation have spawned new therapies, enabling the treatment of diseases previously considered intractable. Increasingly, precision therapies are becoming multiomic, with mechanisms of action spanning DNA, RNA, proteins, and more. Based on ARK's research, the enterprise value of companies focused on precision therapies could appreciate 29% at an annual rate from ~$500 billion in 2022 to ~$3 trillion by 2030,” the report said.
Most Promising Gene Editing Stocks According to Analysts
For this article we scoured different gene editing ETFs, including the Genomic Revolution ETF of Cathie Wood, and picked 11 stocks whose average analyst price target is much higher than their current prices. With each stock we have mentioned its one-year average analyst price target, taken from Yahoo Finance. Some of these companies are pure gene editing firms, while others are working on key projects in DNA sequencing, gene sequencing, genetic engineering and related domains.
Most Promising Gene Editing Stocks According to Analysts
Genetic engineering and DNA solutions company Twist Bioscience Corporation (NASDAQ:TWST) has a strong upside potential from current levels based on its average analyst price target.
Last month, Twist Bioscience Corporation (NASDAQ:TWST) posted fiscal Q1 results. GAAP EPS in the period came in at -$0.74 beating estimates by $0.36. Revenue in the period totaled $54.24 million, missing estimates by $0.23 million.
Jackson Square Partners made the following comment about Twist Bioscience Corporation (NASDAQ:TWST) in its Q3 2022 investor letter:
“Twist Bioscience Corporation (NASDAQ:TWST): market leader in synthetic DNA manufacturing with its highly differentiated silicon platform; poised to unlock a multi-year outsourcing wave as new manufacturing processes and products dramatically improve the turnaround time, cost, and quality of silicon-based DNA manufacturing.”
Massachusetts-based Beam Therapeutics Inc. (NASDAQ:BEAM) is conducting groundbreaking research in the domains of gene therapies and genome editing. Beam Therapeutics Inc. (NASDAQ:BEAM) was trading at around $38 as of March 6, while its analyst price target for the next 12 months is $71.62. This shows that Beam Therapeutics Inc. (NASDAQ:BEAM) has a strong upside potential from its current levels.
At the end of the last quarter of 2022, 18 hedge funds had stakes in Beam Therapeutics Inc. (NASDAQ:BEAM). The total value of these stakes was $632 million.
In February, Cantor Fitzgerald gave bullish comments about Beam Therapeutics Inc. (NASDAQ:BEAM). The firm set a $62 price target on Beam Therapeutics Inc. (NASDAQ:BEAM), saying that the company’s base-editing technology allows it to develop “novel medicines that are highly differentiated from competing therapies.”
During the fourth quarter, Beam Therapeutics Inc. (NASDAQ:BEAM)’s GAAP EPS came in at -$0.54, beating estimates by $0.81. Revenue in the period fell about 61% on a YoY basis to reach $20.04 million, beating estimates by $7.31 million.
California-based Graphite Bio, Inc. (NASDAQ:GRPH) is a gene editing company working on new ways to treat diseases. Graphite Bio, Inc. (NASDAQ:GRPH) remained in the spotlight in February after several analyst firms downgraded Graphite Bio, Inc. (NASDAQ:GRPH) following the company’s announcement that it was going to halt research into sickle cell disease candidate GPH101.
Bank of America downgraded the biotech to Underperform from Neutral. However, the firm believes Graphite Bio, Inc. (NASDAQ:GRPH) has "the potential and resources to reinvent itself.”
Editas Medicine, Inc. (NASDAQ:EDIT) ranks 8th in our list of the most promising gene editing stocks according to analysts. The Massachusetts-based gene editing company develops a proprietary gene editing platform based on CRISPR technology.
During the fourth quarter, Editas Medicine, Inc. (NASDAQ:EDIT)’s net loss came in at $60.74 million, compared to a loss of $41.44 million posted in the comparable period the prior year.
Cantor Fitzgerald recently gave bullish comments on Editas Medicine, Inc. (NASDAQ:EDIT). The firm set a $15 price target for Editas Medicine, Inc. (NASDAQ:EDIT), as it believes the stock is “well-positioned to appreciate in the coming year due to favorable IP positioning and expected clinical data updates.”
Adaptive Biotechnologies Corporation (NASDAQ:ADPT) ranks 7th in our list of the most promising gene editing stocks according to analysts. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) says its mission is to “translate the genetic language of the adaptive immune system into clinical products to diagnose and treat disease.”
In February, Adaptive Biotechnologies Corporation (NASDAQ:ADPT) posted upbeat Q4 results. GAAP EPS in the quarter came in at -$0.28, beating estimates by $0.06. Revenue in the period jumped about 45.6% on a YoY basis to total $55.2 million, beating estimates by $0.64 million. Operating expenses in the quarter totaled $94.4 million, compared to $99.5 million posted in the same quarter last year.
In December 2022, Adaptive Biotechnologies Corporation (NASDAQ:ADPT) jumped after Piper Sandler analyst David Westenberg upgraded the stock to Overweight from Neutral with a price target of $14, up from $7.50.
Ginkgo Bioworks Holdings, Inc. (NSYE:DNA) is one of the most promising gene editing stocks. Ginkgo Bioworks Holdings, Inc. (NSYE:DNA) is working on several innovative solutions in the genomic engineering space. For example, Ginkgo Bioworks Holdings, Inc. (NSYE:DNA) designed over 3,000 genome edits that modulate expression of native E. coli genes, and applied these to a previously-engineered production strain.
A total of 25 hedge funds tracked by Insider Monkey reported owning stakes in Ginkgo Bioworks Holdings, Inc. (NSYE:DNA) at the end of the fourth quarter of 2022.
Earlier this month, Ginkgo Bioworks Holdings, Inc. (NSYE:DNA) posted fourth-quarter results. GAAP EPS in the period came in at -$0.10 beating estimates by $0.11.
