Apart from artificial intelligence (AI) and cryptocurrency, genome editing research and development has long been a popular stock on Wall Street. Intellia Therapeutics (NASDAQ:NTLA) just earned a critical regulatory green light in this field, propelling Intellia Therapeutics stock higher. Analysts rate the biotechnology firm as a “Strong Buy,” but it still demands extensive due diligence before advancing. On NTLA, I am still undecided though.
Intellia “announced that the U.S. Food and Drug Administration has cleared the company’s Investigational New Drug application for NTLA-2002 for the treatment of hereditary angioedema, enabling the company to include the United States in the global Phase 2 portion of its ongoing Phase 1/2 study,” as reported by TheFly.
NTLA-2002 is a candidate for in-vivo genome editing that is “intended to inactivate the target gene, kallikrein B1, to permanently diminish plasma kallikrein protein activity and hence prevent HAE attacks following a single-dose treatment.”
RBC Capital Markets analyst Luca Issi joined in, saying, “this is an important milestone for Intellia as it is the first-ever (investigational new drug application) cleared by the FDA for in-vivo gene editing.” Essentially, the announcement has the potential to be a game changer since it advances scientific progress along with a promising therapeutic approach.
Unsurprisingly, NTLA stock increased by approximately 11% in the week ended March 3. Yet, investors should proceed with care when it comes to Intellia and gene editing in general.
The NTLA Stock is Exciting, but Danger Factors Remain
On the surface, NTLA appears to be one of the most appealing market opportunities. CRISPR, which stands for Clustered Regularly Interspaced Short Palindromic Repeats, is used by Intellia. In layman’s terms, it’s a gene-editing technology that supports a faster, cheaper, and more accurate DNA editing process than previous techniques.
CRISPR-based treatments, in theory, open the door to addressing a wide range of chronic and hereditary disorders, including rare conditions. Bioengineers can use enzymes to target specific DNA sequences and cut the DNA strands. This procedure allows for the removal of existing DNA in order to insert replacement equivalents.
Given the dramatic implications of CRISPR advances, some high-profile investors, like Cathie Wood, have made significant investments in participating companies. While Intellia Therapeutics stock is one of many in the sector, its approval for in-vivo gene editing helps it stand out.
Nonetheless, investors should not rush into NTLA stock without first thoroughly researching CRISPR. The Jackson Library, in particular, stated that while it is an extraordinarily effective instrument, it also has limitations. CRISPR, for example, is not completely efficient. As a result, certain treatment-receiving cells may not exhibit genome editing activity.
Even more significant, CRISPR is not perfect. Indeed, the Jackson Library warns against the possibility of off-target alterations. While such instances are uncommon, they can have serious effects.
Also, while research is ongoing, CRISPR may increase the risk of cancer in modified cells. In other words, if the innovation creates the condition it was designed to treat, the linked businesses may fail.
A Standard Aspirational Biotech
Investors must analyze the underlying financials in addition to the science of NTLA stock. Intellia falls into the category of standard aspirational biotech, for better or worse.
Most notably, Intellia includes alarming operational information outside of the biotech setting. For example, their three-year revenue growth rate (per share) fell to -9.5%. On a year-to-year basis, its operating and net margins have also fallen precipitously.
Not unexpectedly, while NTLA stock has increased more than 15% since its January debut, it is down 37% year to date. It’s also worth noting that previously-hyped gene-editing stocks were blown up as well. Regrettably, volatility is almost unavoidable in this market.
Experts recommend NTLA stock as a buy.
In terms of Wall Street sentiment, NTLA stock has a Strong Buy consensus recommendation based on 12 Buys, four Holds, and zero Sell ratings. The average price target for Intellia Therapeutics is $92.40, showing a 133.25% upside potential.
The Bottom Line: NTLA Stock Entices, but Be Careful
With the development of CRISPR, humanity may eventually be able to cure diseases rather than just manage them. That is the potential NTLA stock is built on. It needs to be seen whether this develops into a viable treatment approach.
CRISPR unlocks doors that were never meant to be opened. With the potential of unforeseen consequences looming over the sector, investors should proceed with caution when purchasing NTLA stock.
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