For years, one of the most dependable sectors, especially for investors who are more conservative, was health care. That included the top pharmaceutical and biotech stocks. However, over the past five years, the sector, while delivering positive total returns, has massively underperformed the more popular sectors, like technology.
Biotechnology was a huge laggard last year, with the Nasdaq Biotechnology Index up a tiny 0.03% and the SPDR S&P Biotech exchange-traded fund was down a stunning 20%. Compare that with the massive 28.68% gain for the S&P 500 and the 22.21% gain for the Nasdaq, and you can bet those holding the top stocks are disappointed. The good news is that just 15 stocks make up 40% of the S&P 500 market capitalization, and inexpensive biotechnology leaders may be just the remedy for investors looking for value in 2022 in what is a very expensive stock market.
The biotechnology team at Truist Securities is out with its five top picks for 2022. For growth stock investors with a higher degree of risk tolerance, these may be just the right path to some sensational 2022 performance. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
CRISPR Therapeutics
This is a top play for investors looking for winners in the diabetes arena. CRISPR Therapeutics AG (NASDAQ: CRSP) is a gene-editing company, focusing on developing transformative gene-based medicines for serious human diseases.
The company develops its products using Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR)/CRISPR-associated protein 9, a gene-editing technology that allows for precise directed changes to genomic DNA. It has a portfolio of therapeutic programs in a range of disease areas, including hemoglobinopathies, oncology, regenerative medicine and rare diseases.
The company’s lead product candidate is CTX001, an ex vivo CRISPR gene-edited therapy for treating patients suffering from transfusion-dependent beta thalassemia or severe sickle cell disease in which a patient’s hematopoietic stem cells are engineered to produce high levels of fetal hemoglobin in red blood cells. It also develops CTX110, a donor-derived gene-edited allogeneic CAR-T therapy targeting cluster of differentiation 19 positive malignancies; allogeneic CAR-T programs comprising CTX120 targeting B-cell maturation antigen for the treatment of relapsed or refractory multiple myeloma; and CTX130 for the treatment of solid tumors and hematologic malignancies
The Truist report noted this:
We are bullish on cell therapy for diabetes being pursued by CRSP, in partnership with ViaCyte (Private). While earlier iteration of the technology, using the encapsulation strategy was suboptimal, results using next generation strategy, PEC-Direct (VC-02), reported at ADA 2021 were encouraging with material improvements. VC-02 led to insulin production in serum glucose dependent manner and increased time in range from 54% to 88% and reduced A1c from 7.4% to 6.6%. VCTX210, currently in clinic, was developed in collaboration with CRISPR for stealth to bypass the need for chronic immunosuppression.
The Truist Securities price target for CRISPR Therapeutics stock is $220, while the consensus target is $151.56. The stock popped almost 5% on Monday to close at $79.24.
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