What's in Store for CRISPR (CRSP) This Earnings Season?

In the absence of any marketed product, we expect investors’ focus to be on the progress of CRISPR Therapeutics AG’s CRSP pipeline candidates when the company reports second-quarter 2020 results. In the last reported quarter, the company delivered a negative earnings surprise of 5.5%.

Notably, CRISPR Therapeutics’ earnings history is mixed. This biotech company beat estimates in two of the last four quarters while missing the same twice, with the average surprise being 374.36%.

Shares of CRISPR Therapeutics have gained 48.3% so far this year compared with the industry’s increase of 5.3%.


Let’s see how things have shaped up for this announcement.

Factors to Note

CRISPR Therapeutics is a gene editing company focused on developing CRISPR/Cas9-based therapeutics. The company is leveraging its CRISPR/Cas9 gene-editing platform to make therapies for the treatment of hemoglobinopathies, cancer, diabetes and other diseases.

CRISPR Therapeutics has a collaboration with Vertex Pharmaceuticals VRTX to develop gene therapies for treating transfusion-dependent beta thalassemia ("TDT"), sickle cell disease ("SCD"), Duchenne muscular dystrophy ("DMD") and Myotonic Dystrophy Type 1 (DM1). This collaboration generates revenues for the company in the form of milestone payments. The company received a $25 million milestone payment from Vertex Pharma in April related to the development of therapy for DM1 indications. The payment is expected to have been recorded as revenue in the second quarter.

The company is developing its lead gene-editing candidate, CTX001 in collaboration with Vertex Pharma in phase I/II studies as a treatment for TDT and SCD. Currently, the studies have not achieved enrollment target but it has been paused due to COVID-19. We expect CRISPR Therapeutics to provide an update on the enrollment status in these studies on the second-quarter earnings call.

The company is also developing immuno-oncology candidates — CAR-T cell therapies — in early-stage studies. It has two allogeneic CAR-T cell therapy candidates — CTX110 and CTX120 — targeting hematologic malignancies, including multiple myeloma. The FDA has also granted an investigational new drug application to initiate a clinical study on another allogeneic CAR-T cell therapy candidate, CTX130. The company is planning to start a study in the second half of 2020. These developments are likely to have driven operating expenses in the quarter. We expect investors to ask questions on the progress of these candidates on the earnings call.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for CRISPR Therapeutics this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (loss of 79 cents per share) and the Zacks Consensus Estimate (loss of 92 cents per share) is +13.78%.

Zacks Rank: CRISPR currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

CRISPR Therapeutics AG Price and Consensus

CRISPR Therapeutics AG Price and Consensus

CRISPR Therapeutics AG price-consensus-chart | CRISPR Therapeutics AG Quote

Stock That Warrant a Look

Here are two biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming release.

Incyte Corporation INCY has an Earnings ESP of +4.62% and a Zacks Rank #3.

Arena Pharmaceuticals, Inc. ARNA has an Earnings ESP of +12.88% and a Zacks Rank #3.

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Incyte Corporation (INCY): Free Stock Analysis Report

Arena Pharmaceuticals, Inc. (ARNA): Free Stock Analysis Report

Vertex Pharmaceuticals Incorporated (VRTX): Free Stock Analysis Report

CRISPR Therapeutics AG (CRSP): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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