CRISPR Therapeutics AG (CRSP) Bundle
Understanding CRISPR Therapeutics AG (CRSP) Revenue Streams
Understanding CRISPR Therapeutics AG’s Revenue Streams
The company reported total revenue of $1.6 million for the nine months ended September 30, 2024, a significant decrease from $170 million in the same period of 2023.
Breakdown of Primary Revenue Sources
- Collaboration Revenue: $0 for the nine months ended September 30, 2024, compared to $170 million for the same period in 2023.
- Grant Revenue: $1.623 million for the nine months ended September 30, 2024, up from $0 in the same period of 2023.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate indicates a decrease of approximately 99.1% from 2023 to 2024, driven primarily by the absence of collaboration revenue.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change (in thousands) |
|---|---|---|---|
| Collaboration Revenue | $0 | $170,000 | ($170,000) |
| Grant Revenue | $1,623 | $0 | $1,623 |
| Total Revenue | $1,623 | $170,000 | ($168,377) |
Analysis of Significant Changes in Revenue Streams
The most notable change in revenue streams was the complete absence of collaboration revenue in 2024, which had previously contributed $170 million in 2023 due to an upfront payment and milestone achievement from a collaboration agreement with a partner. The company recognized $0 revenue under the March 2023 Agreements for the nine months ended September 30, 2024.
Additionally, grant revenue of $1.623 million was recognized in 2024, marking the only source of revenue for the year, indicative of the company's shift towards securing grants while collaboration revenue remains constrained.
Overall, the financial performance reflects a challenging revenue environment, with the company needing to rely on alternative funding sources, such as grants, to sustain operations going forward.
A Deep Dive into CRISPR Therapeutics AG (CRSP) Profitability
A Deep Dive into CRISPR Therapeutics AG's Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the total revenue was $1.623 million, with a gross profit margin of 0.1% as there were no significant revenue streams from collaboration. In comparison, for the same period in 2023, the total revenue was $170 million, reflecting a gross profit margin of 100% due to prior collaboration agreements.
Operating Profit Margin: The operating loss for the nine months ended September 30, 2024, was ($401.978 million), leading to an operating margin of (24,745.54%). For the nine months ended September 30, 2023, the operating loss was ($292.121 million), which translated into an operating margin of (171.70%).
Net Profit Margin: The net loss for the nine months ended September 30, 2024, was ($328.941 million), resulting in a net profit margin of (20,221.46%). In contrast, for the nine months ended September 30, 2023, the net loss was ($242.957 million)(142.97%).
Trends in Profitability Over Time
The profitability trends indicate a significant decline in gross and operating margins primarily due to the absence of collaboration revenue in 2024 compared to 2023. The operating expenses have also seen a reduction, from $462.121 million in 2023 to $403.601 million in 2024, reflecting a focus on cost management.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the average operating margin for the biotechnology industry is approximately (20%). The current operating margin for CRISPR Therapeutics AG is significantly lower at (24,745.54%) due to high operational costs and low revenue. The net profit margin for the industry averages around (5%), whereas the company reports a net profit margin of (20,221.46%), indicating a critical need for revenue generation to offset high operational costs.
Analysis of Operational Efficiency
Operational efficiency metrics highlight a decrease in research and development expenses from $292.188 million in 2023 to $238.498 million in 2024. General and administrative expenses also decreased from $59.683 million to $54.853 million over the same period, indicating improved cost management strategies.
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Total Revenue | $1.623 million | $170 million | ($168.377 million) |
| Gross Profit Margin | 0.1% | 100% | 99.9% |
| Operating Loss | ($401.978 million) | ($292.121 million) | ($109.857 million) |
| Net Loss | ($328.941 million) | ($242.957 million) | ($85.984 million) |
| R&D Expenses | $238.498 million | $292.188 million | ($53.690 million) |
| G&A Expenses | $54.853 million | $59.683 million | ($4.830 million) |
Debt vs. Equity: How CRISPR Therapeutics AG (CRSP) Finances Its Growth
Debt vs. Equity: How CRISPR Therapeutics AG Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, CRISPR Therapeutics AG reported total liabilities of $316.5 million. This includes both current and long-term liabilities, with current liabilities amounting to $89.8 million. The company has not disclosed significant long-term debt levels, indicating a reliance on equity financing to support its operations and growth initiatives.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical metric for assessing financial leverage. CRISPR Therapeutics AG's debt-to-equity ratio stands at approximately 0.16 as of September 30, 2024. This ratio is significantly lower than the industry average for biotechnology companies, which typically ranges from 0.5 to 1.0, indicating a conservative approach to leveraging debt for growth.
Recent Debt Issuances and Credit Ratings
Currently, CRISPR Therapeutics AG does not have any publicly traded debt securities or outstanding bonds, reflecting a focus on equity financing. The company has maintained a strong liquidity position with $1.9 billion in cash, cash equivalents, and marketable securities. As of September 30, 2024, the company's credit rating remains unassigned, as it has not issued traditional debt instruments.
Balancing Debt Financing and Equity Funding
CRISPR employs a strategy that emphasizes equity financing. In February 2024, the company completed a registered direct offering that raised approximately $280 million by selling common shares at a price of $71.50 per share. This move was part of a broader strategy to secure funds for ongoing research and development without incurring debt obligations. The financing activities for the nine months ended September 30, 2024, included net proceeds of $315 million from equity offerings, a substantial increase from $23.7 million in the same period in 2023.
| Financial Metric | Value |
|---|---|
| Total Liabilities | $316.5 million |
| Current Liabilities | $89.8 million |
| Debt-to-Equity Ratio | 0.16 |
| Cash and Cash Equivalents | $1.9 billion |
| Recent Equity Raise (Feb 2024) | $280 million |
| Net Proceeds from Equity (9M 2024) | $315 million |
Assessing CRISPR Therapeutics AG (CRSP) Liquidity
Assessing CRISPR Therapeutics AG's Liquidity
Current and Quick Ratios
The current ratio for CRISPR Therapeutics AG as of September 30, 2024, is calculated as follows:
- Current Assets: $1,935.6 million
- Current Liabilities: $316.5 million
- Current Ratio: 6.12
The quick ratio, which excludes inventories from current assets, is similar due to the absence of inventory. Thus, the quick ratio is also:
- Quick Ratio: 6.12
Analysis of Working Capital Trends
As of September 30, 2024, the working capital is calculated as:
- Working Capital: Current Assets - Current Liabilities = $1,935.6 million - $316.5 million = $1,619.1 million
This indicates a strong liquidity position, with significant reserves to cover short-term obligations.
Cash Flow Statements Overview
The cash flow trends for the nine months ended September 30, 2024, are as follows:
| Cash Flow Category | 2024 (in thousands) | 2023 (in thousands) | Change (in thousands) |
|---|---|---|---|
| Net Cash Used in Operating Activities | (92,743) | (164,302) | 71,559 |
| Net Cash (Used in) Provided by Investing Activities | (386,309) | 456,100 | (842,409) |
| Net Cash Provided by Financing Activities | 315,108 | 23,725 | 291,383 |
| Effect of Exchange Rate Changes on Cash | 66 | 12 | 54 |
| Net (Decrease) Increase in Cash | (163,878) | 315,535 | (479,413) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company holds $1,935.6 million in cash, cash equivalents, and marketable securities, indicating a robust liquidity position. However, the accumulated deficit stands at $1,328.6 million, suggesting ongoing operational losses. Funding requirements will necessitate additional capital through equity or debt financing to sustain operations and support ongoing research and development efforts .
Is CRISPR Therapeutics AG (CRSP) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze various financial ratios, stock price trends, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is not applicable as the company reported a net loss of $328.9 million for the nine months ended September 30, 2024, resulting in a diluted net loss per share of $3.92.
Price-to-Book (P/B) Ratio
As of September 30, 2024, the book value per share stands at approximately $22.83 (calculated from total shareholders' equity of $1.94 billion and total shares outstanding of 85.3 million). The stock price was around $71.50 following a recent offering, resulting in a P/B ratio of approximately 3.13.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The company does not currently generate positive EBITDA, as it reported total operating expenses of $403.6 million for the nine months ended September 30, 2024. Therefore, the EV/EBITDA ratio is also not applicable.
Stock Price Trends
The stock price has experienced significant volatility over the past twelve months. Here is a summary of the price trends:
| Date | Stock Price (USD) |
|---|---|
| September 2023 | 45.00 |
| December 2023 | 70.00 |
| March 2024 | 71.50 |
| June 2024 | 75.00 |
| September 2024 | 71.50 |
Dividend Yield and Payout Ratios
The company does not currently pay dividends, and therefore the dividend yield is 0%.
Analyst Consensus
Analyst consensus on the stock valuation is mixed, with a majority rating it as a Hold. The average target price among analysts is around $65.00.
The valuation analysis indicates that the company is currently trading at a premium compared to its book value, and the lack of positive earnings makes traditional valuation metrics challenging to apply. The stock's recent performance shows fluctuations, and the absence of dividend payments suggests a focus on growth rather than immediate returns to shareholders.
Key Risks Facing CRISPR Therapeutics AG (CRSP)
Key Risks Facing CRISPR Therapeutics AG
Overview of Internal and External Risks
CRISPR Therapeutics AG faces a variety of internal and external risks that impact its financial health:
- Industry Competition: The biopharmaceutical sector is highly competitive, with numerous companies pursuing similar gene editing technologies.
- Regulatory Changes: Regulatory approvals are critical for product commercialization. Delays or changes in regulations can adversely affect product timelines.
- Market Conditions: Economic downturns or shifts in market sentiment can affect financing options and partnerships.
Operational Risks
Operational risks include challenges in research and development (R&D) processes, which may lead to increased costs and delays. For the nine months ended September 30, 2024, R&D expenses were $238.5 million, down from $292.2 million in the same period in 2023, reflecting a decrease of $53.7 million .
Financial Risks
Financial risks are highlighted by the company's accumulated deficit of $1.3 billion as of September 30, 2024. The company has also experienced significant net losses, reported at $328.9 million for the nine months ended September 30, 2024 .
Strategic Risks
Strategic risks involve the company's ability to execute its business model. Revenue from collaborations dropped significantly, with no collaboration revenue reported for the nine months ended September 30, 2024, compared to $170.0 million in the same period in 2023 .
Mitigation Strategies
The company aims to mitigate these risks through diversified funding strategies, including equity and debt financing. As of September 30, 2024, the company had $1.9 billion in cash, cash equivalents, and marketable securities. In February 2024, CRISPR Therapeutics entered into an investment agreement for the sale of approximately $280 million of common shares .
| Risk Factor | Description | Impact on Financial Health | Mitigation Strategy |
|---|---|---|---|
| Industry Competition | High competition in gene editing technologies | Potential loss of market share | Diversified product pipeline |
| Regulatory Changes | Delays or changes in regulatory approvals | Impact on product launch timelines | Engagement with regulatory bodies |
| Market Conditions | Economic downturns affecting funding | Limited access to capital | Maintaining cash reserves |
| Operational Risks | Challenges in R&D and product development | Increased costs and delays | Streamlining operations |
| Financial Risks | Accumulated deficit and net losses | Reduced investor confidence | Exploring strategic partnerships |
Conclusion
CRISPR Therapeutics AG's financial health is influenced by a complex interplay of risks, necessitating vigilant management and strategic planning to navigate the challenges ahead.
Future Growth Prospects for CRISPR Therapeutics AG (CRSP)
Future Growth Prospects for CRISPR Therapeutics AG
Analysis of Key Growth Drivers
The company's primary growth drivers include product innovations, market expansions, and strategic collaborations. As of September 30, 2024, the total revenue was reported at $1.6 million, a significant decline from $170 million in the same period the previous year, primarily due to the absence of collaboration revenue.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth projections remain cautious, given the current market dynamics. Analysts expect that revenue could rebound as new therapies progress through clinical trials. The company has potential milestone payments from collaborations, totaling up to $775 million under various agreements. The net loss for the nine months ended September 30, 2024, was $328.9 million, compared to $242.9 million in the same period in 2023.
Strategic Initiatives or Partnerships
The company has ongoing partnerships that are pivotal for its growth trajectory. In February 2024, it entered into an agreement for the sale of common shares worth approximately $280 million to institutional investors, which is expected to bolster its financial position. Additionally, it has a collaboration with Vertex Pharmaceuticals, which could yield up to $160 million in milestone payments.
Competitive Advantages
CRISPR Therapeutics AG maintains a competitive advantage through its cutting-edge gene-editing technology. As of September 30, 2024, the company reported $1.9 billion in cash, cash equivalents, and marketable securities, providing a substantial buffer for ongoing research and development. The accumulated deficit stood at $1.3 billion, highlighting the capital-intensive nature of its operations.
| Financial Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Revenue | $1.6 million | $170 million | - |
| Net Loss | $328.9 million | $242.9 million | - |
| Cash, Cash Equivalents & Marketable Securities | $1.9 billion | - | - |
| Accumulated Deficit | $1.3 billion | - | - |
| Potential Milestone Payments | $775 million | - | - |
Conclusion
Despite current challenges reflected in financial performance, the company’s strong cash position and strategic partnerships offer a pathway for future growth. The ongoing development of its gene-editing technologies positions it well within the biotechnology landscape.
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Updated on 16 Nov 2024
Resources:
- CRISPR Therapeutics AG (CRSP) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of CRISPR Therapeutics AG (CRSP)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View CRISPR Therapeutics AG (CRSP)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.