If you're an investor searching for the next big market winners, Wall Street analysts have zeroed in on one biotech stock that could deliver huge gains in a defined time frame.

Citing positive developments in its development programs, analysts from a couple of investment banks think CRISPR Therapeutics (CRSP -2.12%) could more than double your money in the year ahead.

Before committing any amount of your own money to this stock, it's important to remember the analysts who recommended it have very little to lose. If things don't work out, they can quietly lower their price targets, but that won't repair the damage they inflicted on your retirement progress.

Wall Street is pounding the table on CRISPR Therapeutics

As its name suggests, this is a commercial-stage developer of gene therapies that use CRISPR/Cas9 technology to edit genes. Its first treatment, Casgevy, earned approval from the Food and Drug Administration (FDA) to treat sickle cell disease in December 2023.

Last January, the FDA approved Casgevy again to treat patients with beta-thalassemia, another hemoglobin-related disorder. Citing political uncertainty regarding healthcare, Bank of America analyst Alec Stranahan recently lowered his price target on the stock to $85 from $98 per share while maintaining a buy rating. Despite the significant price target reduction, Stranahan's prediction still implies a 114% gain over the next 12 months from the stock's closing price on Jan. 10.

Meanwhile, Truist analyst Joon Lee has an even higher $100 price target on CRISPR Therapeutics stock that implies a 152% gain.

Before you risk a nickel on this volatile biotech stock, you should know that sales of Casgevy haven't gotten off the ground yet. The company's collaboration partner, Vertex Pharmaceuticals (VRTX 0.93%), made progress activating authorized treatment centers capable of administrating Casgevy, but CRISPR still hasn't reported any sales.

CRISPR Therapeutics' big challenge

Casgevy treatment allows sickle cell and beta-thalassemia patients to produce their own fetal hemoglobin. Its efficacy is proven, but selling the treatment has been an uphill battle.

Casgevy is essentially a vial of a patient's stem cells that have been edited outside their body to permanently produce fetal hemoglobin, a protein that carries oxygen from point A to point B. Unfortunately, manufacturing therapies in batches of one is an enormous challenge, and so is selling a treatment intended to function permanently after a single administration.

With a list price of $2.2 million, CRISPR doesn't need to sell heaps of Casgevy to make ends meet, but uptake has been excruciatingly slow. In the middle of last October, 40 patients had begun the treatment process with a cell collection. By the end of December, there were just 50 patients who had reached the cell collection stage. In other words, just 10 patients started the therapy in the space of two and a half months.

If we assume all patients who began treatment with Casgevy last year progress to the administration stage, CRISPR and Vertex could receive roughly $100 million in top-line sales. Unfortunately, CRISPR's portion won't be nearly enough to cover operating expenses. The company burned through $329 million during the first nine months of 2024.

CRISPR Therapeutics' next potential blockbuster

Analysts setting lofty price targets for CRISPR Therapeutics are anticipating more than just Casgevy sales. In December, CRISPR presented preliminary trial results for CTX112, an experimental treatment aimed at a wide range of blood cancers that affect immune cells produced by bone marrow.

In a phase 1 trial, eight out of 12 patients treated with different dosages of CTX112 responded to treatment. Six achieved complete remission. These results are highly encouraging because these patients had already failed previous therapies. Unlike Casgevy, CTX112 is an off-the-shelf solution, which could make it a lot easier to sell if it eventually earns approval.

Despite heavy losses, the company finished November with $1.9 billion in cash, cash equivalents, and marketable securities. This is more than enough to keep operations humming along until we know a lot more about CTX112's future.

A buy now?

The FDA granted CTX112 a regenerative medicine advanced therapy designation. The designation allows CRISPR Therapeutics to engage with the agency early, which could expedite its development. The company expects to tell investors more about its timeline in the middle of 2025.

At recent prices, CRISPR Therapeutics sports a $1.5 billion enterprise value, which seems reasonable for a commercial-stage drugmaker with a next-generation blood cancer treatment in clinical trials.

Wall Street analysts aren't wrong to predict big gains from CRISPR Therapeutics, but their lofty price targets come with assumptions that might not work out as hoped. If Casgevy sales don't take flight or CTX112 falters, folks who buy now could suffer heavy losses. If your risk tolerance isn't sky-high, it's probably best to avoid this stock.