Regenxbio: Transforming Gene Therapy With Innovative AAV Treatments, Strong Buy

Company Overview - REGENXBIO Inc. is a clinical-stage biotechnology company focused on developing adeno-associated virus (AAV) gene therapies for both common and rare diseases, utilizing its proprietary NAV platform to create one-dose AAV treatments that target the root causes of diseases [9][24] - The company has a diverse pipeline that includes ABBV-RGX-314 for age-related macular degeneration (AMD) and diabetic retinopathy (DR), RGX-202 for Duchenne muscular dystrophy (DMD), and RGX-121 for Hunter syndrome [25][26][18] Market Potential - The global market potential for ABBV-RGX-314 is estimated to be approximately $17.0 billion over the next five years, with the US anti-VEGF market alone valued at $4.5 billion annually [6] - The US retinal disease market is projected to reach $11.5 billion, while the EU market is estimated at $4.5 billion and Japan at $1 billion [6] - The global market for DMD is estimated at $7.0 billion, and for Mucopolysaccharidosis Type II (MPS II), it is around $1.0 billion [6] Financial Position - RGNX's balance sheet shows $113.0 million in cash and equivalents, plus $225.7 million in marketable securities, totaling $338.7 million in liquidity after a recent $140.0 million equity raise [13] - The company's latest quarterly cash burn was $56.1 million, indicating a yearly cash burn rate of $224.4 million, which suggests a cash runway of about 1.5 years, sufficient to finance operations until late 2025 [13] Clinical Development - ABBV-RGX-314 is currently in phases 2 and 3 for wet AMD, with regulatory submissions planned for late 2025 and early 2026 [10] - RGX-202 is in phase 2 for DMD, utilizing an AAV8 vector to deliver a transgene that encodes a microdystrophin protein to restore muscle functionality [26] - RGX-121 is in a pivotal study for MPS II, with plans to file a Biologics License Application (BLA) in 2024 [18] Strategic Collaborations - RGNX has a strategic collaboration with AbbVie for the development of ABBV-RGX-314, which includes a $200.0 million milestone payment related to DR [8][15] - AbbVie has committed significant resources, including a $370 million upfront payment for the rights to ABBV-RGX-314, with potential additional development and milestone payments totaling up to $1.38 billion [27] Valuation and Investment Outlook - RGNX trades at a market cap of $693.5 million, with a forward price-to-sales (P/S) ratio of 2.8, which is considered cheap compared to the sector median of 3.7 [29] - The company is viewed as undervalued despite its promising pipeline and potential revenue streams from ongoing projects and collaborations [22][29]