On Friday, RBC Capital maintained its Outperform rating and $35.00 price target for Regenxbio Inc. (NASDAQ:RGNX), following discussions with the company's executive team. The talks included the newly appointed CEO and covered several topics, notably Regenxbio's potential in the Duchenne muscular dystrophy (DMD) market and advancements in ocular gene therapy.
The analyst highlighted recent regulatory developments as a positive sign for the DMD sector, specifically referencing the broad label granted to a competitor by CBER Director Peter Marks. Regenxbio is poised to be a strong second in the market with its differentiated product, assuming clinical trial hypotheses hold. Additionally, the company has the opportunity to serve patients ineligible for competitors' treatments due to pre-existing neutralizing antibodies.
In the field of ocular gene therapy, the analyst expressed a cautious stance on treatments delivered subretinally for wet age-related macular degeneration (wAMD) due to the complexity of the condition. However, there was a more optimistic outlook for treatments of diabetic retinopathy delivered suprachoroidally, citing a significant unmet need and a less competitive environment.
The firm's positive stance is reinforced by Regenxbio's enterprise value of approximately $200 million, which is considered modest compared to its competitors.
RBC Capital anticipates key upcoming catalysts for the company, including an end-of-Phase II meeting for its DMD therapy, potential accelerated approval, initial data on DMD functional outcomes, a filing for MPSII that may result in a $100 million Priority Review Voucher, and the start of a pivotal trial for diabetic retinopathy, which could lead to a $200 million milestone from AbbVie (NYSE:ABBV).
In other recent news, REGENXBIO Inc. has announced the expansion of its Phase I/II AFFINITY DUCHENNE trial, which includes a new cohort for boys aged 1-3 with Duchenne muscular dystrophy. The trial's expansion involves the investigational gene therapy RGX-202 and is expected to enroll up to five patients. Moreover, REGENXBIO plans to initiate the pivotal trial between late Q3 and early Q4 of 2024.
The company has also reported progress with its drug candidate RGX-121 for the treatment of mucopolysaccharidosis type II (MPS II). H.C. Wainwright has maintained a Buy rating on the company's stock, with the FDA agreeing to use cerebrospinal fluid levels of heparan sulfate D2S6 as a surrogate endpoint. This could potentially support the accelerated approval of RGX-121.
In terms of leadership, Curran Simpson has assumed the role of President and Chief Executive Officer at REGENXBIO. RBC Capital has also maintained its Outperform rating on the company's stock, citing strategic positioning in the market.
For the first quarter, REGENXBIO reported a total revenue of $15.6 million and a net loss of $63.3 million, a decrease from the estimated $70.7 million loss. The company's CAMPSIITE trial successfully met its primary endpoint, leading to a significant reduction in cerebrospinal fluid levels of D2S6 at 16 weeks with RGX-121 treatment. These are the recent developments at REGENXBIO Inc.
InvestingPro Insights
RBC Capital's recent endorsement of Regenxbio Inc. (NASDAQ:RGNX) aligns with certain financial metrics and InvestingPro Tips that investors might consider. Regenxbio's current market capitalization stands at approximately $632.94 million, which, when juxtaposed with the enterprise value noted by RBC Capital, suggests a robust market presence. However, it's important to note that Regenxbio's P/E ratio as of Q1 2024 is negative at -2.48, reflecting that the company is not currently generating profits. This is consistent with an InvestingPro Tip indicating that analysts do not expect the company to be profitable this year.
Another key point from InvestingPro is that Regenxbio holds more cash than debt on its balance sheet, which could be a sign of financial stability. This is particularly relevant as the company navigates the capital-intensive phases of clinical trials and seeks regulatory approvals. On the flip side, the company is quickly burning through cash, and with a gross profit margin at -203.23% for the last twelve months as of Q1 2024, it underscores the challenges faced in reaching profitability.
For investors looking for a more in-depth analysis, InvestingPro offers additional tips on Regenxbio. Currently, there are 7 more InvestingPro Tips available, which can be accessed by visiting: https://www.investing.com/pro/RGNX. Interested in unlocking these insights? Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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