Are Gene Therapy Stocks The Market's Next Big Winners?

Key Points

• Biotechs Sarepta and BioMarin are developing million-dollar gene therapies for severe genetic disorders.
• Gene therapy is poised for explosive growth, with analysts predicting substantial market expansion.
• The global cell and gene therapy market is expected to reach approximately $82.24 billion by 2032.

It’s not often that you see a company whose main product comes with a price tag of over $2 million, but that’s the case with biotechs BioMarin Pharmaceutical NASDAQ: BMRN and Sarepta Therapeutics NASDAQ: SRPT, which are developing gene therapies. ‘

Analysts say the gene therapy business is about to see an explosion in growth. That means gene therapy technologies could be the future drivers of big price gains, as we’ve seen with AI and weight-loss drugs this year.

No, those products priced at $2 million or more per treatment aren’t prescriptions you’ll pick up at your local pharmacy. 

However, they are promising treatments for very serious genetic conditions. As you might guess, these are sophisticated gene therapies with the potential to disrupt the ways certain disorders are treated. 

According to data from Precedence Research, the global cell and gene therapy market size was valued at $15.46 billion in 2022 and is projected to reach approximately $82.24 billion by 2032. That’s a compound annual growth rate of 18.3% from 2023 to 2032.

Sarepta Therapeutics

Sarepta specializes in targeted gene therapies, particularly for muscular dystrophy. The Cambridge, Massachusetts company currently has four products that have gotten the nod from regulators. Its treatments specialize in Duchenne muscular dystrophy (DMD), a progressive illness that shortens patients’ life expectancies. 

In May, Sarepta stock gapped up 30.77% after the Food and Drug Administration OK’d an experimental treatment for DMD. 

A look at the Sarepta Therapeutics chart shows you the stock has been correcting since then, but wild price swings are not unusual with biotech stocks, particularly those like Sarepta that are not yet profitable.

However, that situation is expected to change: Wall Street expects the company to pivot to profitability next year, with earnings of $3.32 a share. 

Sarepta’s Elevidys treatment is priced at a cool $3.2 million, which, of course, no consumers are shelling out. The company’s cost-benefit analysis has shown that it will be a cost-effective expense for health insurers. It also believes the Elevidys treatment will be discounted. 

BioMarin Pharmaceutical

The California company recently got a stock price boost from positive clinical trial results from its experimental drug Roctavian, a gene therapy for blood disorder hemophilia. 

Roctavian has a list price of $2.9 million. 

However, in this case, and with other biotechs whose products carry a price tag of $1 million or more, some analysts say insurance will pick up the tab, although others say high prices could make treatments prohibitive for more patients. 

As is the case with Sarepta, this stock can show some volatile trade, as you can see on the BioMarin Pharmaceutical chart. 

In 2022, it posted nearly $2.1 billion in total revenues. That total includes a significant contribution from the launch of Voxzogo, a prescription medicine to increase linear growth in children with achondroplasia, a genetic disorder causing dwarfism due to abnormal bone growth. 

BioMarin has been profitable since 2017, and Wall Street expects that trend to continue, with earnings growing 181% next year to $2.56 a share. 

Other Cutting-Edge Gene Therapy Companies

A number of other publicly traded healthcare stocks and biotech stocks are companies known for their work in developing cutting-edge gene therapies.

In addition to Sarepta and BioMarin, those companies include:

• Novartis AG NYSE: NVS: Novartis is known for its gene therapy drug Zolgensma, which treats spinal muscular atrophy.
• Regeneron Pharmaceuticals, Inc. NASDAQ: REGN: Regeneron has a gene therapy platform focused on several genetic diseases.
• Biogen Inc. NASDAQ: BIIB: Biogen is involved in gene therapy research for various neurological and genetic disorders.
• Editas Medicine, Inc. NASDAQ: EDIT: Editas focuses on therapies developed using the CRISPR gene-editing tool.
• CRISPR Therapeutics AG NASDAQ: CRSP: CRISPR Therapeutics is a leader in CRISPR gene-editing technology and is working on therapies for blood disorders and other genetic diseases.
• Intellia Therapeutics, Inc. NASDAQ: NTLA: Intellia is another company using CRISPR technology for gene therapy research.
• Bluebird Bio, Inc. NASDAQ: BLUE: Bluebird Bio is known for its work in gene therapy, including treatments for rare genetic disorders like beta-thalassemia, a blood disorder.
• Solid Biosciences Inc. NASDAQ: SLDB: Solid Biosciences focuses on gene therapy for muscular dystrophy and other genetic diseases.
• Orchard Therapeutics plc (ORTX): Orchard Therapeutics develops gene therapies for various rare diseases, including immune disorders.

Gene therapies have the potential to revolutionize healthcare by providing one-time treatments with benefits that last for years.

While many of these treatments are becoming viable and getting the OK from regulators, their high prices may be a hurdle to overcome before the treatments are more widely available, which means delivering consistently high returns to healthcare stock and biotech stock investors.