Intellia Therapeutics (NTLA) received an investment-rating downgrade Tuesday to neutral from buy from Chardan Capital Markets, which cited the outperformance this year of the genome-editing company’s shares versus peers while saying the firm still has a positive bias on the stock.
Chardan kept its price target on the shares at $20 per share, which is slightly below the stock’s Monday closing price of $20.82. The shares jumped 19% in Monday’s session to that closing level but edged down 1.6% in recent Tuesday pre-market trading to $20.48.
In a note to clients, Chardan highlighted that Intellia’s shares have soared 59% in the year to date as of Monday’s close, well outperforming competitors in the genome-editing technology known as CRISPR as well as the SPDR S&P Biotech Index. Among CRISPR peers, Editas Medicine (EDIT) is up 28% in the year to date and CRISPR Therapeutics (CRSP) is down 2.8% this year while the SPDR S&P Biotech Index (XBI) is up 36% for 2017.
“Based upon this relative [year-to-date] outperformance, we downgrade Intellia to neutral with a positive bias, with a favorable outlook for investors with 2018+ time horizons,” the firm said.
Chardan said it remains concerned over Intellia’s intellectual-property risk associated with the ongoing patent interference between the University of California and the Broad Institute. It expects the appeals process to conclude within eight to 14 months.
However, the firm said, “beyond the IP overhang, we are bullish on Intellia due to the widespread potential of CRISPR gene editing in gene therapy, since CRISPR technology can be used for target gene inactivation, restoration, or repair.”
Chardan added: “We are intrigued by Intellia’s application of CRISPR gene editing as a potentially one-time therapy in TTR amyloid diseases, even while these programs are still in preclinical development.”