Mad Hedge Biotech and Healthcare Letter
February 11, 2025
Fiat Lux
Featured Trade:
(SPLICING THROUGH SKEPTICISM)
(CSRP), (VRTX), (AMZN), (TSLA)
Mad Hedge Biotech and Healthcare Letter
February 11, 2025
Fiat Lux
Featured Trade:
(SPLICING THROUGH SKEPTICISM)
(CSRP), (VRTX), (AMZN), (TSLA)
When I pioneered fracking technology in Texas years ago, skeptics said we were crazy. Today's skeptics are saying the same thing about CRISPR Therapeutics (CRSP), and they're just as wrong.
Here's a company sitting on a $1.9 billion cash fortress, burning through a mere $100 million per quarter – giving them enough runway to circle the Earth 19 times – and yet the stock has drifted down to $40, shedding 15% since my last analysis when it was perched at $48.
Talk about the market missing the forest for the trees.
Remember when everyone thought Amazon (AMZN) was just a bookstore? Well, CRISPR Therapeutics isn't just another biotech company – it's the Tesla (TSLA) of gene editing, with Vertex Pharmaceuticals (VRTX) riding shotgun.
And just like Tesla wasn't just about making electric cars, CRISPR isn't just about Casgevy, their FDA-approved treatment for Sickle Cell Disease (SCD) and Transfusion-Dependent Beta Thalassemia (TDT).
Speaking of Casgevy, let's tackle the elephant in the room. Yes, patient enrollment has been slower than a government committee deciding on lunch options. They've collected cells from over 50 patients by year-end, up from 20 in mid-October.
Not exactly setting speed records, but here's what the market is missing: the Centers for Medicare and Medicaid Services just inked a deal with Vertex/CRISPR that could be a game-changer.
Why? Because 50-60% of SCD patients are on Medicaid.
But wait, there's more happening behind the scenes. The company has been quietly building an empire across 5 clinical programs and 10 preclinical programs.
Let's break down what's cooking in their kitchen.
The Casgevy rollout has expanded from 35 treatment centers in October to over 50 by year-end.
Eight jurisdictions have given them the green light, including Saudi Arabia – a market where SCD is about as common as sand.
The UK just signed on for reimbursement, first for TDT in August 2024, and now for SCD.
Their CAR-T program isn't just targeting blood cancers anymore. They've expanded into autoimmune diseases like Systemic sclerosis (SSc) and Idiopathic inflammatory myopathy (IIM).
We're talking about potential treatments for 2.5 million SSc patients globally (125,000 in the US) and 1 million IIM patients (50,000 in the US).
That's not just a market – it's an ocean.
They're even taking shots at liver cancer and cardiovascular diseases. Their latest trial for Heterozygous familial hypercholesterolemia could be a lifeline for patients with this genetic cholesterol disorder.
And speaking of cash runways, their $1.9 billion war chest means they can keep this scientific symphony playing for 19 quarters without passing around the collection plate.
In biotech terms, that's like having enough food to last through three winters.
Institutions are noticing, too. Cathie Wood just backed up the truck, dropping $10 million more into CRISPR, making it her 9th largest holding at $350 million. Her ARK funds now own over 9% of the company.
When smart money moves like this, I pay attention.
Here's the kicker: While most analysts raise their ratings as speculative stocks climb (a strategy that makes as much sense as buying umbrella futures during a drought), I'm doing the opposite.
After all, the fundamentals are stronger than ever, but the price is lower.
Looking ahead to 2025, we've got more potential catalysts than a chemistry textbook. Phase 1/2 trial data for CTX 112 is coming in Q2/Q3, CTX 131 in Q3/Q4, and updates on their Type 1 Diabetes program in the second half of the year.
Remember, this is the same company that has Vertex Pharmaceuticals – the biotech equivalent of having Warren Buffett as your investment advisor – as a partner.
They're not just getting financial support; they're getting a masterclass in how to commercialize breakthrough treatments.
The verdict? Load up on shares while the market gives us this gift wrapped in fear and uncertainty.
Twenty years ago, they called us crazy for thinking we could extract oil from solid rock. Today, they're just as skeptical about editing genes.
History has a funny way of repeating itself.
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