Applied Genetic Notches Sell-Side Upgrade After Releasing Interim Study Data

Biotechnology company Applied Genetic Technologies Corp AGTC presented interim six-month data Thursday for the Phase 1/2 XLRP program in X-linked retinitis pigmentosa, turning BMO Capital Markets bullish on the stock. 

The Analyst

Matthew Luchini upgraded Applied Genetics from Market Perform to Outperform rating with a price target lifted from $5 to $9.

The Thesis

Applied Genetic's interim six-month data for eight patients dosed peripherally showed stable visual function supported by visual field sensitivity and visual acuity assessments, Luchini said in a Friday note. (See his track record here.) 

Other highlights from the release include four of the eight patients showing a measurable improvement in the treated area and all nine centrally dosed patients showing stable or improving visual acuity assessments, the analyst said. 

The interim results should give investors "preliminary proof-of-concept" and increase the likelihood of ultimate success from 10% to 25%, he said. 

The six-month XLRP data for the dose expansion cohort is expected to come before the end of the year, and this will be critical for the full assessment compared to Nightstar's visual sensitivity data, Luchini said.

The company could use visual sensitivity as a Phase 3 primary endpoint, and a sustained improvement from patients could improve sentiment on a $100-million peak sales opportunity, according to BMO Capital Markets. 

Price Action

Applied Genetic shares were trading 3.24% higher at $4.13 at the time of publication Monday. 

Related Links:

Benzinga's Top Upgrades, Downgrades For September 27, 2019

Sell-Side Roundup: What's Next For For Applied Genetic After 50% Plunge?