Goldman Sachs Optimistic About Regenxbio's Gene Therapy Pipeline, Sees Over 160% Upside

Goldman Sachs has initiated coverage on Regenxbio Inc RGNX, citing the potential for the company’s gene therapy platform.

The company’s pipeline includes gene therapy candidates for ophthalmology (wet AMD and diabetic retinopathy), Duchenne muscular dystrophy (DMD), and Hunter syndrome.

The analyst predicts that RGX-314 for wet AMD and diabetic retinopathy will have limited market penetration, primarily serving specific patient subgroups due to the high standards of efficacy and safety set by newer anti-VEGF treatments that require fewer injections, e.g., high dose Regeneron Pharmaceutical Inc’s REGN Eylea, Roche Holdings AG’s RHHBY Vabysmo.

Also Read: This Gene Therapy Player Duchenne Data Is Impressive, Analyst Upgrades REGENXBIO.

Goldman Sachs initiated coverage with a Buy rating, with a price target of $38.

Additionally, Goldman seeks clarification on key issues such as the risk/benefit balance of fewer anti-VEGF injections compared to the potential for inflammation and steroid use and how this approach differs from competing programs like 4D Molecular Therapeutics Inc FDMT.

Even modest adoption could lead to blockbuster sales, which seems reasonable given the significant presence of partner AbbVie Inc’s ABBV in ophthalmology.

The analyst says gene and cell therapy stocks have underperformed recently due to macroeconomic factors and interest rates.

However, Goldman Sachs anticipates that upcoming events, such as additional DMD data, Hunter filing, and suprachoroidal wAMD/DR data in the second half of 2024, as well as subretinal wAMD data and filing in 2025, will boost Regenxbio’s share performance in the near to intermediate term.

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Price Action: RGNX shares are up 2.25% at $14.07 at last check Friday.