The COVID-19 pandemic has fueled the growth of biotechnology companies, driven by the growing prevalence of chronic diseases and rising expenditure on research and development. The increasing adoption of advanced technology, including artificial intelligence, is benefiting the biotech sector. And growth in the biotech sector is aided by the possibility of online and remote diagnosis and treatment of patients around the globe. According to a report by Precedence Research, the global biotechnology market is projected to reach $1.68 trillion by 2030, growing at a 8.7% CAGR.
Due to current macro headwinds, including the Fed's Hawkish tilt, surging inflation, rising U.S. Treasury yields, supply chain disruptions, and the Russia-Ukraine war, renowned institutional investor Cathie Wood's portfolio was hard hit. Wood's ARK Genomic Revolution ETF (ARKG), which holds a diverse portfolio of stocks in the biotech sector, took a thumping. However, we think the recent market tumult provides an excellent opportunity for long-term investors to add Cathie Wood stocks to their portfolios on a dip in their prices. Given the biotech industry's promising growth prospects, these stocks are well-positioned to weather the market fluctuations and grow handsomely in the near term.
Against this backdrop, Wall Street analysts expect Cathie Wood's quality biotech stocks CRISPR Therapeutics AG (CRSP), Intellia Therapeutics, Inc. (NTLA), Beam Therapeutics Inc. (BEAM), Fate Therapeutics, Inc. (FATE), and Ginkgo Bioworks Holdings, Inc. (DNA) to surge in price in the coming months.
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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. The stock has a 2.43% weighting across all Ark ETFs.
In February, CRSP and ViaCyte, Inc., a clinical-stage regenerative medicine company, announced that the first patient had been placed in the 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. This strategic collaboration might boost the company's growth and profitability.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, CRSP's total revenue increased 3,386.2% year-over-year to $12.90 million. Its collaboration revenue improved 6,264.9% from the prior-year period to $12.35 million, while its grant revenue rose 213.1% year-over-year to $551,000. The company's total other income grew 282.1% year-over-year to $2.25 million.
The $2.45 million consensus revenue estimate for its fiscal year 2022 first quarter, ended March 31, 2022, represents 354.6% growth from the same period in 2021. It is no surprise that CRSP has surpassed the consensus revenue estimates in three of the trailing four quarters.
The stock declined 24% in price year-to-date and 10.5% over the past three months. It closed yesterday's trading session at $57.58.
Among the 12 Wall Street analysts that rated CRSP, eight rated it Buy, while four rated it Hold. The 12-month median price target of $110.00 indicates a 91% potential upside. The price targets range from a low of $64.00 to a high of $170.00.
Intellia Therapeutics, Inc. (NTLA)
NTLA is a genome editing company. The Cambridge, Mass., concern 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. The stock has a 2.24% weighting across all Ark ETFs.
On March 1, NTLA announced that the first patient had received 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.
This February, NTLA entered a lease agreement to build a manufacturing facility in Waltham, Mass., for its CRISPR-based investigational therapies. "This new facility is a strategic investment, which in combination with existing capabilities and partnerships, will provide us with significant manufacturing capacity and accelerate the clinical development and future commercial production for our therapeutic candidates," said Intellia's Chief Technical Officer Eliana Clark.
NTLA's collaboration revenue increased 94.9% year-over-year to $12.85 million in its fiscal 2021 fourth quarter, ended Dec. 31, 2021. Its interest income grew 143% year-over-year to $503,000. For its fiscal year 2021, ended December 31, the company's cash and cash equivalents and marketable securities rose 81.8% year-over-year to $1.09 billion, while its total assets increased 104.9% from the previous year to $1.29 billion.
Analysts expect NTLA's revenue for its fiscal 2022 first quarter, ended March 31, 2022, to come in at $8.70 million, representing a 35% rise year-over-year. The company has an impressive earnings surprise history; it has surpassed the consensus EPS estimates in each of the trailing four quarters.
Shares of NTLA have plunged 23.8% in price over the past month and 33.6% over the past three months and closed yesterday's trading session at $54.84.
Among the 16 Wall Street analysts that rated NTLA, 14 rated it Buy, while two rated it Hold. The 12-month median price target of $148.15 indicates a 170.2% potential upside. The price targets range from a low of $83.00 to a high of $190.00.
Beam Therapeutics Inc. (BEAM)
BEAM in Cambridge, Mass., is a biotechnology company that develops precision genetic medicines for severe diseases in the U.S. The company is developing BEAM-101 to treat sickle cell disease and beta-thalassemia, BEAM-102 for the treatment of sickle cell disease, and BEAM-201 for the treatment of acute lymphoblastic leukemia. It also develops therapies for ocular diseases and other liver, muscle, and nervous system disorders. BEAM has a 1.87% weighting across all Ark ETFs.
In January, BEAM and Pfizer Inc. (PFE) entered a research collaboration focused on in vivo base editing programs for rare genetic diseases of the liver, muscle, and central nervous system. The programs will utilize BEAM's leadership in base editing and mRNA/LNP delivery technologies and PFE's messenger RNA (mRNA), Lipid nanoparticles (LNP), and gene therapy. This collaboration is expected to advance transformative therapies for patients with rare diseases.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, BEAM's license and collaboration revenue amounted to $51.07 million. Its net interest and other income grew 54.3% from the prior-year period to $54,000. The company's cash, cash equivalents, and marketable securities rose 222.2% year-over-year to $965.65 million for its fiscal 2021 (ended December 31). Its total assets increased 226.4% from the prior year to $1.47 billion.
The $50.46 million consensus revenue estimate for its fiscal 2022 first quarter, ended March 31, 2022, represents 840,838% growth from the same period in 2021. The Street expects the company's EPS for the current quarter to rise 66.8% year-over-year. It is no surprise that BEAM has surpassed the consensus revenue estimates in three of the trailing four quarters.
The stock has slumped 45.1% in price year-to-date and 30.4% over the past three months. It closed yesterday's trading session at $43.77.
Among the seven Wall Street analysts that rated BEAM, four rated it Buy, while three rated it Hold. The 12-month median price target of $113.57 indicates a 159.5% potential upside. The price targets range from a low of $80.00 to a high of $152.00.
Fate Therapeutics, Inc. (FATE)
FATE is a clinical-stage biopharmaceutical company. It develops programmed cellular immunotherapies for cancer and immune disorders worldwide. The San Diego, Calif., company is developing programs that include FT516 to treat acute myeloid leukemia (AML) and advanced solid tumor, FT596 to treat B-cell lymphoma, FT538 to treat AML and multiple myeloma, FT576 to treat multiple myeloma, and FT536 to treat solid tumors. FATE has a 1.99% weighting across all Ark ETFs.
On January 10, FATE announced U.S. Food and Drug Administration (FDA) clearance for FT536, a multiplexed-engineered, IPSC-derived, chimeric antigen receptor (CAR) NK cell product candidate for the treatment of solid tumors. This is expected to boost the company's growth.
Last December, FATE presented positive clinical data from the FT516 phase 1 study for B-cell lymphoma (BCL) at the 63rd American Society of Hematology Annual Meeting and Exposition. In addition, the FDA granted Regenerative Medicine Advanced Therapy (RMAT) designation to FT516 for the treatment of relapsed/refractory diffuse large B-cell lymphoma (DLBCL). These developments might boost FATE's profitability.
FATE's collaboration revenue increased 7.4% year-over-year to $17.07 million in its fiscal year 2021 fourth quarter, ended Dec. 31, 2021. Its total other income rose 103.9% year-over-year to $761,000. For its fiscal year 2021, ended December 31, the company's cash and cash equivalents amounted to $133.58 million. In addition, its total current assets increased 28.1% from the prior year to $633.41 million.
Analysts expect FATE's revenue for its fiscal year 2023, ending Dec. 31, 2023, to come in at $57.35 million, representing a 34.6% rise year-over-year. The company has an impressive earnings surprise history; it has surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock declined 6.9% in price over the past three months. It closed yesterday's trading session at $36.60.
Among the seven Wall Street analysts that rated FATE, six rated it Buy, while one rated it Hold. The 12-month median price target of $88.00 indicates a 140.4% potential upside. The price targets range from a low of $50.00 to a high of $117.00.
Ginkgo Bioworks Holdings, Inc. (DNA)
Boston-based DNA develops a platform for cell programming. The company's platform is used to program cells to enable the biological production of products. It serves various end markets, including specialty chemicals, pharmaceuticals, agriculture, food, and consumer products. DNA has a partnership with Selecta Biosciences, Inc. to develop the ImmTOR technology platform. The stock has a 1.15% weighting across all Ark ETFs.
Last week, DNA and FREDsense Technologies Corp, a water quality platform company, partnered to build biosensors for water quality monitoring and detection. DNA wants to make four distinct microbial strain biosensors for remote water quality monitoring applications compatible with FREDsense's field-ready hardware through this partnership.
On April 12, DNA and Persephone Biosciences Inc., a synthetic biology company that focuses on patient and infant health, announced a collaboration to develop novel therapeutics based on the bacterial genus Bacteroides. The partnership is expected to enhance the company's anaerobic engineering capability and boost its business growth.
On April 11, DNA and Elanco Animal Health Incorporated (ELAN) launched BiomEdit, a microbiome innovation company. BiomEdit will discover and develop animal health products by leveraging microbiome science to improve animal health. The launch of BiomEdit might leverage DNA's unique screening and strain engineering capabilities.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, DNA's biosecurity service revenue increased 1,428% to $105.92 million. The company's total revenue grew 363.2% from the prior-year period to $148.49 million. DNA's cash and cash equivalents rose 307% year-over-year to $1.55 billion for fiscal 2021 (ended December 31). Its total current assets increased 304% from the prior year to $1.72 billion.
Analysts expect DNA's revenue for its fiscal year 2022 ending Dec. 31, 2022, to come in at $341.34 million, representing an 8.8% rise year-over-year. The Street expects the company's EPS for the current year to increase 65.6% year-over-year.
DNA stock has improved 16.7% in price over the past month and closed yesterday's trading session at $3.64.
Among the five Wall Street analysts that rated DNA, three rated it Buy, while two rated it Hold. The 12-month median price target of $7.63 indicates a 109.6% potential upside. The price targets range from a low of $6.00 to a high of $11.50.
Click here to checkout our Healthcare Sector Report for 2022
CRSP shares were trading at $55.67 per share on Thursday afternoon, down $1.91 (-3.32%). Year-to-date, CRSP has declined -26.54%, versus a -6.20% 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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