Key Takeaways
- Recent pronounced gains in CRISPR Therapeutics and Moderna are not indicative of a broad biotech sector recovery, but rather reflect highly specific, company-level developments that are creating divergent paths for the two firms.
- CRISPR Therapeutics has pivoted from a speculative R&D entity to a commercial-stage, profitable company, driven by significant collaboration revenue from its newly approved gene-editing therapy, Casgevy.
- Moderna faces the immense challenge of navigating a post-COVID revenue cliff, relying on its substantial cash reserves and the success of its broader mRNA pipeline, including the recently approved RSV vaccine, to justify its valuation.
- The performance gap highlights a market that is increasingly discerning, rewarding tangible commercial execution over purely narrative-driven potential, especially within a restrictive macroeconomic environment.
The recent and potent rallies observed in biotech pioneers CRISPR Therapeutics (CRSP) and Moderna (MRNA) offer a compelling glimpse into the sector’s current psyche. While both stocks have delivered notable returns for investors in the second quarter of 2024, these movements are not synchronised signals of a rising tide lifting all vessels. Instead, they represent two fundamentally different investment theses unfolding in real time: one of a breakthrough technology achieving commercial viability, and the other of a platform scrambling to prove its value beyond a singular, historic success.
While the Nasdaq Biotechnology Index has remained largely range-bound, the sharp, idiosyncratic moves in these two names suggest the market is no longer painting the sector with a broad brush. A more granular analysis reveals a bifurcation between speculative promise and demonstrated profitability, a theme likely to define biotech investing for the foreseeable future.
From R&D Speculation to Commercial Reality
For years, CRISPR Therapeutics existed as a proxy for the immense, yet distant, promise of gene editing. The investment case was built on a compelling narrative and the potential of its scientific platform. However, the first quarter of 2024 marked a profound inflection point. The company reported its first profitable quarter, booking net income of $202.9 million, a stark reversal from the losses that characterised its R&D phase.1
This was not driven by operational efficiencies but by the recognition of substantial collaboration revenue from Vertex Pharmaceuticals tied to the landmark approval and launch of Casgevy, the first CRISPR-based gene-editing therapy. The company has effectively crossed the chasm from a speculative, cash-burning entity into a commercial-stage enterprise. This transition fundamentally alters its risk profile and explains the market’s renewed enthusiasm. Investors are no longer underwriting a scientific hypothesis; they are pricing in a tangible, revenue-generating asset that validates the entire platform’s potential.
The Burden of Past Success
Moderna’s story is almost the inverse. Buoyed by the unprecedented success of its Spikevax COVID-19 vaccine, the firm amassed a formidable balance sheet. The current challenge, however, is proving it can replicate that success and build a sustainable business model beyond the pandemic. First-quarter 2024 results laid this challenge bare, with revenues falling to $167 million from $1.9 billion the prior year, resulting in a net loss of $1.2 billion.2
The recent share price strength, therefore, is not a reflection of current earnings but of forward-looking optimism. This optimism is pinned on two factors: its substantial cash pile, which provides a long runway for research, and progress in its non-COVID pipeline. The recent US Food and Drug Administration (FDA) approval for its respiratory syncytial virus (RSV) vaccine, mRESVIA, is a crucial first step in this diversification.3 Still, the market remains focused on whether its combined pipeline in areas like oncology and rare diseases can eventually fill the vast revenue void left by Spikevax.
A Tale of Two Companies
The divergent fundamentals of these two biotech leaders become particularly clear when viewed side-by-side. One is celebrating its first taste of profitability, while the other is managing a decline from extraordinary highs.
| Metric | CRISPR Therapeutics (CRSP) | Moderna (MRNA) |
|---|---|---|
| Market Capitalisation (Approx.) | £4.1 billion | £41.5 billion |
| Q1 2024 Revenue | $945.7 million | $167 million |
| Q1 2024 Net Income / (Loss) | $202.9 million (Profit) | ($1.2 billion) (Loss) |
| Primary Driver | Commercialisation of Casgevy; Platform validation | Pipeline diversification; Monetisation of cash reserves |
| Key Risk | Pace of Casgevy’s market adoption and sales ramp | Failure of key pipeline assets to reach market |
Note: Financial figures are based on Q1 2024 earnings reports. Market capitalisation is approximate and subject to market fluctuation.
Navigating from Here
The performance of these two stocks underscores a critical shift in the investment landscape. In an environment of higher interest rates, the market’s patience for long-duration, speculative growth stories has worn thin. Capital is flowing towards companies that can demonstrate a clear path to, or have already achieved, profitability. CRISPR’s recent success is a testament to this, as its de-risking has made it stand out.
For Moderna, the path forward is more complex. Its valuation is heavily dependent on future clinical trial outcomes. While the approval of mRESVIA is a significant milestone, the company must continue to execute flawlessly on its pipeline to convince investors that its platform is more than a one-hit wonder.
As a closing hypothesis, the bifurcation we see between CRISPR and Moderna may become a defining feature of the biotech sector itself. We could see a “barbell” market develop: on one end, commercially viable platform companies with validated, revenue-generating products; on the other, cash-rich pharma giants looking to acquire them. The vast middle ground of pre-revenue R&D firms may face a much tougher environment for capital. Consequently, the ultimate validation for CRISPR Therapeutics might not just be its sales figures, but its eventual emergence as a prime acquisition target for an established player seeking to buy, rather than build, a foothold in the future of medicine.
References
- CRISPR Therapeutics. (2024, May 8). CRISPR Therapeutics Reports First Quarter 2024 Financial Results and Business Updates. Retrieved from CRISPR Therapeutics Investor Relations.
- Moderna Inc. (2024, May 2). Moderna Reports First Quarter 2024 Financial Results and Provides Business Updates. Retrieved from Moderna Investor Relations.
- U.S. Food and Drug Administration. (2024, May 31). FDA Approves First Vaccine for Use in Adults Ages 60 and Older to Prevent Lower Respiratory Tract Disease Caused by Respiratory Syncytial Virus. [Press Release, updated for Moderna’s approval]. Retrieved from fda.gov.
- Nataninvesting. (2024, June 21). [Post showing strong performance for $CRSP and $MRNA]. Retrieved from https://x.com/nataninvesting/status/1804153913076121852
