Shares of Genus (LSE: GNS) surged 27% today (30 April), easily putting it top of the FTSE 250‘s daily leaderboard. I’ve been anticipating a potential move higher, as this UK stock has been on my radar for a while now.

Back in September, I wrote: “I’ve put it on my watchlist to keep an eye on the gene-edited pig. It could be a game-changer for the global pork industry and the firm’s growth.”

Gene-edited pig? As strange as that sounds, that is indeed the reason for today’s massive share price jump. Let’s dig into some details.

What is Genus?

Firstly, a little background info on Genus. This is an animal genetics company that helps farmers breed pigs and cattle that grow faster, stay healthier, and produce better meat. It operates a mainly royalty-based model.

Genus’ porcine division, known as PIC (Pig Improvement Company), provides pig farmers with superior breeding stock and semen. And its bovine unit, called ABS (Animal Breeding Services), offers dairy and beef cattle breeders access to elite bull semen and embryos. 

The firm’s competitive edge comes from the ownership and control of proprietary lines of breeding animals, and the biotechnology used to improve them. This last bit underpins today’s share price jump.

Major breakthrough

To many, gene-editing still sounds like pig’s-might-fly technology, but it’s starting to have a real-world impact. By altering the CD163 gene, Genus has made pigs resistant to porcine reproductive and respiratory syndrome (PRRS).

This is a highly contagious viral disease that causes widespread losses for pig farmers worldwide. Recent research indicates that PRRS increases the need for antibiotics by more than 200%. Therefore, any gene-edited pig line that resists this disease should enjoy significant demand.

Today, the firm announced that the US Food and Drug Administration (FDA) has approved its PRRS Resistant Pig (PRP) programme for use in the American food supply chain. PRP meat is identical to that from non-edited pigs. So this is a significant development.

Brazil, Colombia, and the Dominican Republic have already issued positive determinations for PRP. More regulatory approvals should follow now that the FDA has given the nod, including key US export markets for pork like Mexico, Canada, and Japan.

Matt Culbertson, Genus PIC’s Chief Operating Officer, said: “We have spent years conducting extensive research, validating our findings and working with the FDA to gain approval. Today marks a major milestone for the pork industry.”

Should I invest?

Now, as exciting as this sounds, analysts don’t expect this programme to be bringing home the bacon until FY27 (beginning July 2026).

After that, though, profits could skyrocket, with a China approval expected at some point. At its 2023 investor day, Genus said PRP could be “financially transformative“.

If so, the stock’s seemingly high forward price-to-earnings ratio of 24 today could end up looking cheap in a couple of years.

In the meantime, there are some risks to consider. One is sluggish top-line growth, with full-year revenue expected to tick up just 1%. Another is reciprocal tariffs, which could impact US pork exporters.

On balance though, this stock looks undervalued to me, given the potential here. Assuming Genus doesn’t keep surging over the coming days, I may buy a few shares. But I won’t go the whole hog and bet the farm.