Shares of gene therapy developer Regenxbio (RGNX 9.16%) fell nearly 18% Friday morning after the biopharma provided a year-end 2017 corporate update Thursday evening. The clinical-stage company has a pipeline buzzing with activity, but Wall Street seems a little disappointed with the expected timing of study updates.
Regenxbio expects to report top-line data for four early stage drug candidates -- RGX-314, RGX-501, RGX-111, and RGX-121 -- in "late 2018." Wall Street seems worried that the vague wording creates the possibility for data rollouts to be pushed back to early 2019 if delays are encountered. That being the case, it decided to take its money out of the stock and park it in other investments with better near-term prospects.
As of 11:22 a.m. EST, the stock had settled to a 14.9% loss.
Other than jittery Wall Street analysts, the 2017 corporate update didn't create much cause for concern. Regenxbio, a leader in adeno-associated virus (AAV) gene therapy technologies, ended 2017 with over $175 million cash. It achieved a cash burn rate much lower than anticipated and expects to burn $85 million to $95 million in the year ahead as it advances its early stage assets.
In addition to developing its own pipeline of drug candidates, Regenxbio has licensed its novel AAV technology portfolio to more than 20 product candidates partnered with gene therapy leaders such as Shire and AveXis. The AAV space has received tremendous attention and investment in the last two years as large and small biopharma companies search for ways to safely and accurately deliver gene therapy payloads into cells -- historically a major technical roadblock.
The company's licensing strategy provides significant potential to de-risk in-house clinical development and provide capital for long-term investments, which has no doubt aided the company in achieving a clean balance sheet and market valuation near $1 billion.
Regenxbio is still in the early stages of development, but has an intriguing amount of potential. And as far as early stage biopharma companies go, investors could do a lot worse. Nonetheless, whether you see Friday's drop as a buying opportunity or not, it's important to remember that the company's technology strategy has a long way to go before being validated in the market with commercialized products.