10 Aug RegenxBio Inc: A Compelling Investment Opportunity!
RegenxBio, Inc (NASDAQ: RGNX) is a clinical-stage biotechnology company which is cementing its place as a global leader in gene therapies, targeting the treatment of retinal, metabolic, and neurodegenerative diseases. The Company is leveraging a proprietary NAV Technology Platform to develop a pipeline of candidates that utilize adeno-associated viral vectors (AAV) viral vectors, besides licensing selective NAV vectors to other pharmaceutical companies.
RegenxBio, Inc (NASDAQ: RGNX)
Market Cap: $1.38B; Current Share Price: 32.50 USD
Data by YCharts
Strengths
The Company’s NAV AAV9 vector has been used to deliver the SMN gene for young children suffering from Spinal Muscular Atrophy through Novartis’s Zolgensma. The drug, which was approved in May 2019, is one of the most expensive drugs in the world and costs over $2.1 million per patient. The drug has crossed over $1 billion in sales, resulting in a milestone payment of $80 million for RegenxBio and nearly $140 million in royalties and commercial payments since its approval.
Novartis’s subsidiary AveXis, renamed as Novartis Gene Therapies, had entered into an exclusive licensing agreement with RegenxBio in 2014, for worldwide commercial license to the NAV AAV9 vector. The agreement was later extended in 2018 for the entire NAV technology platform for treatment of SMA.
RegenxBio has exclusive rights to AAV7, AAV8, AAV9, AAVrh10 and over 100 other novel AAV vectors (NAV Vectors), including over 100 patents covering composition of matter, methods for their manufacture and therapeutic uses. The Company is focused on building a robust patent portfolio which will provide a strong backing for its current and future research and development programs.
The Company’s proprietary NAV technology platform offers numerous advantages over earlier versions of AAV vectors such as the ability to deliver various types of genetic material, broad application to multiple disease states, much simpler manufacturing process, longer-lasting gene expression at smaller doses and reduced likelihood of triggering an immune response.
RegenexBio’s developmental pipeline consists of RGX-314, its lead candidate for the treatment of Retinal disease such as Wet AMD, Diabetic Retinopathy, and other additional chronic retinal conditions treated with anti-VEGF. The candidate is currently undergoing evaluation in a Phase 3 ATMOSPHERETM trial, the first of the two planned pivotal trials, studying the efficacy of subretinal delivery of RGX-314 in patients with wet AMD.
Furthermore, the candidate is also being evaluated in a Phase II AAVIATE trial studying the suprachoroidal delivery of RGX-314 for the treatment of wet AMD. In addition, the Company is also engaged in a Phase II trial ALTITUDE for the treatment of Diabetic retinopathy (DR) that is evaluating the suprachoroidal delivery of RGX-314.
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The Company is developing a one-time gene therapy RGX-181, which has been granted an orphan drug designation and a rare pediatric drug designation by the FDA, for the treatment of late-infantile neuronal ceroid lipofuscinosis type 2 (CLN2) disease, a common form of Batten Disease. RGX-181 uses the AAV9 vector to deliver the tripeptidyl peptidase 1 (TPP1) gene, whose deficiency is the primary cause of CLN2, directly to the central nervous system (CNS).
The Company’s Neurodegenerative pipeline consists of RGX-121 intended for the treatment of Mucopolysaccharidosis Type II (MPS II), also known as Hunter syndrome, which has received an orphan drug, rare pediatric disease and fast track designation from the FDA. The Company is currently enrolling patients in a phase I/II clinical trials of intracisternally delivered RGX-121.
RGX-111, the Company’s candidate for the treatment of Mucopolysaccharidosis Type I (MPS I) is currently enrolling patients in a Phase I/II trial and has been granted an orphan drug, rare pediatric disease and fast track designation by the FDA.
The Company has entered into a co-commercialization agreement with neuroimmune for Tauopathies α-synucleinopathies.
The other programs in the pipeline consist of Hereditary Angioedema and DMD that are undergoing preclinical studies.
RegenxBio has built multiple strategic industry partnerships, collaborations and licensing agreements with industry leading pharmaceutical companies such as Novartis, Pfizer, Takeda, Sarepta, Lilly, Esteve, Ultragenyx, Astella and Rocket Pharma to name a few.
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Weakness
The Company has filed a patent infringement lawsuit against Sarepta Therapeutics for gene therapy programs that include Duchenne muscular dystrophy and limb-girdle muscular dystrophy, which it believes violate the intellectual property rights of a patent originally owned by the University of Pennsylvania. The dispute revolves around US Patent No 10,526,617, which covers a cultured host cell containing a recombinant nucleic acid molecule encoding the capsid protein, which it claims is used in Sarepta’s SRP-9001 and SRP-9003.
In November 2018, the Company entered into a licensing agreement with Abeona Therapeutics Inc, through which RegenxBio was to receive a license fee of $8.0 million no later than April 1, 2020. Abeona failed to honor the agreement and subsequently the agreement was terminated, which required them to shell out $20.0 million license fee to RegenxBio, within 15 days of the termination date. The Company has not received anything out of the $28.0 million in license fees till date.
Abeona has filed a claim that the company has breached certain responsibilities to communicate the prosecution of the licensed patents under the November 2018 License. In response the Company has filed a counterclaim in arbitration demanding payment of the $28.0 million of unpaid fees from Abeona, plus accrued interest.
Opportunities
Macular Degeneration is caused by the age-related deterioration of the central portion of the retina named Macula. Macula is responsible for focusing the central vision in the eye and regulates reading, driving, facial and color recognition abilities. It collates the images from the center of the field of vision, and sends it to the optic nerves, so that it can be relayed to the brain. Macular degeneration is characterized by wavy or blurred vision and loss of central vision eventually, though peripheral vision may still be working fine.
Image Source: Macular.Org
The Disease is categorised into “Dry” or “Wet” with an estimated 85% of the cases being “Dry” or atrophic and over 15% of the cases being “WET”. It progresses in three stages namely early-AMD which is characterised by yellow deposits named Drusen being accumulated underneath the retina. The Intermediate stage sees some changes in vision and pigment in the retina followed by the final Late AMD stage, where vision loss is noticeable.
The disease is the leading cause of vision loss for people over 60 years in the U.S, affecting an estimated 11 million people in the United States, and is likely to reach epidemic proportions by 2050, affecting over 22 million Americans, in the absence of research and treatment breakthroughs. According to an estimate, the direct cost of vision loss in North America is over $512.8 billion, and the indirect costs were $179 billion.
According to a report by Transparency Market Research, the global macular degeneration treatment market that was worth over US$ 6.1 billion in 2017, is likely to grow at a CAGR of 6.4% to reach US$ 11.1 billion by 2026. The increase in ageing population and rise in awareness levels will propel the growth in the market.
There is no cure for this illness as yet; however, some research breakthroughs are providing hope for the patients. Current treatment options start with nutritional therapy, especially focused on an antioxidant rich diet. Laser photocoagulation was the earliest treatment for leaking blood vessels in wet AMD; this was followed by Photodynamic Therapy (PDT) with Visudyne™, wherein a Visudyne™ is injected intravenously in the patient’s’ arm, which is then activated through shining non-thermal laser light into the eyes. This treatment was a considerable improvement over conventional therapeutic options as it used low-level, non-thermal lasers to seal off leaking blood vessels, while leaving the healthy ones intact.
However, these cannot prevent reoccurrence of the illness leading to multiple treatment sessions. Most importantly they can only halt the degeneration or rate of progression of the disease and cannot restore lost vision. Additionally, only 10-15% of CNV lesions are eligible for laser treatment. They also have side-effects such as scarring or additional vision loss on account of the use of lasers.
Hence there is a need for a major breakthrough that can prevent repeated reoccurrence of the condition after treatment and offer relief from all forms of wet AMD.
Neuronal Ceroid Lipofuscinosis (NCL), or more commonly known as Batten disease, is a group of rare lysosomal storage disorders attributed to the dysfunction in the autosomal recessive gene, which causes mutations that hinder efficient cell functioning. They disrupt the cell’s natural waste disposal mechanism leading to a build-up of proteins and lipids. According to the data made available by Batten Disease Research and Support Association, an estimated 2 to 4 births per 100,000 are afflicted with this disease.
According to a report by Zion Market Research, the Batten Disease treatment market which was worth nearly USD 35.09 million in 2017 will grow at a CAGR of 2.79% between 2018 and 2023 to reach USD 41.39 million. The growth can be attributed to increasing research and development efforts by companies to find the elusive cure for this debilitating disease.
Threats
The commercial risks that the company faces are related to the success of Zolgensma in the long-term. There is a possibility that competitors may come up with a better product than Zolgensma that may adversely affect its sales and future prospects.
Clinical Trials are fraught with risk and uncertainty. There is a possibility that the candidates in the Company’s developmental pipeline and those of its partners may not be able to meet their clinical endpoints in trials. However, a diverse pipeline will help mitigate the risk in case of adverse results or the failure to meet endpoints in any of its ongoing trials. The success of its clinical trials will help the Company advance its pipeline but it should also be prepared to face any setbacks, in case its ongoing trials fail to meet their endpoints.
Conclusion
RegenxBio has numerous strategic partnerships and valuable revenue streams from licensing agreements for its AAV platform. The Company’s internal pipeline has two candidates with orphan drug designation and exclusive rights to AAV7, AAV8, AAV9, AAVrh10 and over 100 other novel AAV vectors (NAV Vectors), including over 100 patents covering composition of matter, methods for their manufacture and therapeutic uses. The Company is focused on building a robust patent portfolio which will provide a strong backing for its current and future research and development programs.
The Company has the potential to become a valuable player in the Wet AMD space and can become a key player in a burgeoning market, which is poised to be a billion-dollar opportunity in the future.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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References
https://regenxbio.com/rgx-121/
https://regenxbio.gcs-web.com/static-files/8ca72c6e-89a9-434a-b1bf-bf1b2ba4e535
https://www.pharmaceutical-technology.com/features/zolgensma-regenxbio-novartis/
http://ir.regenxbio.com/static-files/5f17d553-da90-4bb4-b936-5c298729546c
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