Should I invest in Editas Medicine?
Editas medicine (NASDAQ: EDIT) is a very forward-looking investment as the company has yet to bring a product to market but has great potential with over 200 current patents and another 800 pending review.
With a Total Addressable Market (TAM) with a potential value of over $ 80 billion for just one of its products, investors have taken notice and institutions continue to recover shares as the company issues more shares. to cover research and development (R&D) costs. Now is the time to invest in Editas Medicine?
This article was originally written by MyWallSt. Read more information from the MyWallSt team on the market here.
The bull case for Editas Medicine
Editas Medicine has some exciting products in its pipeline, but the most advanced in the release process are EDIT-101 and EDIT-301. The first relates to Leber’s congenital amaurosis 10 (LCA10), an inherited disease that causes blindness in infants, and the second relates to sickle cell anemia (SCD) and beta-thalassemia, two diseases of the blood. Globally, about 3 in 100,000 infants are affected by ACL10, 300,000 people by sickle cell anemia and 80 million by thalassemia b. With these numbers and based on existing and marginally effective therapies and associated costs, Editas is expected to make stratospheric sums (hundreds of billions by rough estimates) if its treatments receive FDA approval.
The company is in a stable financial position with approximately $ 650 million in equity while it submits its treatments to clinical trials, pending approval. In addition, to stay out of the water, Editas can continue to issue shares like the 3.5 million it made in January. The company also benefits from collaborative revenue, which is up 14% year-over-year (YoY) to $ 6.5 million in the first quarter of 2021. Editas Medicine’s impressive intellectual property portfolio in makes one of the future top contenders in the gene editing market and that is perhaps why almost 75% of all outstanding stocks are held by institutions like hedge funds and mutual funds .
The bear case for Editas Medicine
According to its first quarter 2021 report, Editas Medicine suffered a loss of $ 0.86 per share, $ 0.10 more than estimates and up almost 25% from a year ago. In addition, R&D expenses increased 21.1% to $ 42 million, and general and administrative expenses increased 20% to $ 21.4 million. This is normal for a company without a viable marketable product, but recent disturbing events have contributed to the volatility of the company’s stock price.
In January, Scientific Director Charles Albright left the company to “pursue another opportunity,” and the following month CEO Cynthia Collins resigned for personal reasons. Trials began on EDIT-101 in the first half of 2019, but preliminary results were not positive, showing little improvement in patients’ vision. All of these factors, coupled with the recent dilution of its shares, have contributed to a 49% year-to-date (YTD) share price decline for Editas Medicine.
So, should you invest in Editas Medicine?
As this is a company using relatively new technology and not yet making any real income from its products, I would approach this investment with a great deal of caution; maybe a small starting position until more test results are announced. The first negative results for EDIT-101 are just that – early – so I’m not too worried. Editas Medicine also has cancer treatments in its pipeline that would target a huge market. Its targeted remedies for global ailments that have troubled humans for eons are the future of medicine. The current share price of the company makes opening a position all the more attractive.
Rapid fire tower:
1. Who is the CEO of Editas Medicine?
President James C. Mullen appointed President and CEO following the departure of Cynthia Collins in February
2. Are there any treatments for LCA10? What is the cost?
Spark Therapeutics’ Luxturna costs $ 425,000 per eye
3. When did Editas Medicine go public?
February 2, 2016
MyWallSt gives you access to over 100 of the best stock picks on the market and the research to back them up. Our team of analysts publish daily news, subscriber podcasts and headlines that move the market. Start your free trial now!
Read on for FREE