CRSP Stock Price Increases 18.98% This Past Week: Why It Happened

By Amit Chowdhry ● Dec 6, 2020
  • The stock price of Crispr Therapeutics AG (NASDAQ: CRSP) has increased by 18.98% over the past week. This is why it happened.

The stock price of gene-editing company Crispr Therapeutics AG (NASDAQ: CRSP) has increased by 18.98% over the past week as it went from $124 per share on November 30 to $147.54 at the close on Friday, December 4. One of the triggers for the price increase likely had to do with an announcement by Alphabet subsidiary DeepMind Technologies.

Last week, biologists and organizers of a biennial protein-folding competition had announced an achievement by researchers at DeepMind. The DeepMind method is expected to have impactful effects by identifying protein-based targets for novel medications. This method uses artificial intelligence to predict how proteins curl up from a linear chain of amino acids into 3D shapes to help carry out tasks in life.

And since contest rules competitors to reveal enough about methods for others to make use of the method, it is likely going to be just months before several other companies match the success of DeepMind. DeepMind’s AlphaFold model was trained on the public data of 170,000 protein structures. This program had required 128 high-end cloud computing cores running for several weeks in order to create the algorithm. Entries were also submitted by Microsoft and Tencent.

By understanding how amino acids direct proteins to twist and fold, it will offer a better understanding of why each protein does so and how the signals are transmitted across cell membranes. As a result, scientists will be able to design better drugs that can be utilized by cells in designated ways. 

During the event, the AlphaFold model was able to provide the structure of a bacterial protein in only 30 minutes. And the Max Planck Institute in Germany was working on that same problem for over a decade, according to Fool. From there, the team can start handling thousands of unsolved proteins in the human genome along with the hundreds of millions of proteins in nature that were not modeled yet.

By better understanding the translation of amino acids to proteins, investors were excited by the prospects of companies in the space including CRISPR Therapeutics. Illumina, Intellia Therapeutics, Thermo Fisher Scientific, and Editas Medicine also saw upticks in their stock prices over the past week.

“This is a 50-year-old problem,” said John Moult, a structural biologist at the University of Maryland, Shady Grove and co-founder of the competition Critical Assessment of Protein Structure Prediction (CASP) via American Association for the Advancement of Science. “I never thought I’d see this in my lifetime.”

Disclosure: I have a small CRSP position in my stock portfolio.