Leerink: Translate Bio's Cystic Fibrosis Candidate Could Generate $1.8B

Leerink sees potential in Translate Bio Inc TBIO mRNA-based candidate for cystic fibrosis patients with Class I mutations.

The Analyst

Leerink's Geoffrey Porges initiated coverage of Translate Bio with an Outperform rating and $24 price target. 

The Thesis

Around 12 percent of patients with cystic fibrosis have Class I mutations — the most severe form of cystic fibrosis and one with no therapeutic treatment, Porges said in the initiation note. (See the analyst's track record here.) 

Patients with the Class I mutation cannot produce the cystic fibrosis transmembrane conductance regulator protein and do not respond to CFTR correctors and potentiators, the analyst said. 

Translate Bio is developing MRT5005, which encodes for a functional CFTR protein when it is delivered by a nebulizer to the lung, Porges said. The drug recently entered a Phase I/II clinical trial in adults with Class I and II mutations in cystic fibrosis, and safety and early results are expected in the fourth quarter. 

Porges said he expects the product to reach $1.8 billion in revenue from Class I cystic fibrosis patients if approved. He forecast a 15-percent probability for successful development in Class I cystic fibrosis and a 10-percent probability for success in other mutations.

Leerink projects a drug launch in late 2022 and for Translate's break-even point to come in 2026. The biotech will need additional financing during its development phase, Porges said. 

The Price Action

Translate shares were down 0.25 percent at $15.90 at the close Monday. 

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