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Why Regenxbio Stock Is Way Up Today

By Cory Renauer – Sep 13, 2021 at 2:40PM

Key Points

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American biopharmaceutical giant AbbVie wants access to Regenexbio's gene therapy for macular degeneration.

What happened

Regenexbio (RGNX -2.26%) stock is shooting higher after the clinical-stage biotech signed a new collaboration deal with AbbVie (ABBV -0.13%), a giant global pharmaceutical company. Investors happy with the generous terms of the deal pushed Regenexbio shares 25.6% higher as of 2:06 p.m. EDT on Monday.

So what 

License and royalty revenue from Novartis regarding Zolgensma isn't nearly enough to fuel Regenexbio's ambitious development pipeline. Today's deal with AbbVie, though, gives the company a lot more cash to work with.

Investor looking at a stock chart.

Image source: Getty Images.

Upfront, AbbVie will pay Regenexbio $370 million for rights to RGX-314, an experimental gene therapy for the treatment of progressive retinal diseases that cause vision loss for millions of older Americans. 

Regenexbio will be responsible for two ongoing phase 2 trials that administer RGX-314 with a relatively simple method of injection. AbbVie will share costs for upcoming trials that employ subretinal injections in the U.S. and lead global development efforts.

Now what

If RGX-314 earns approval, the partners will share equally in profits from net sales in the U.S. AbbVie will pay Regenexbio a tiered royalty percentage on any sales outside of the U.S. 

Under the terms of the agreement, Regenxbio is also eligible to receive up to $1.3 billion in milestone payments.

We'll get to see why AbbVie felt moved to make such a generous offer for Regenexbio later this month. The company will present data from a phase 2 trial with age-related macular degeneration patients at the Retina Society's 54th Annual Scientific Meeting.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Regenxbio. The Motley Fool has a disclosure policy.

Stocks Mentioned

Regenxbio Stock Quote
$22.52 (-2.26%) $0.52
Novartis Ag Stock Quote
Novartis Ag
$90.74 (-0.24%) $0.22
AbbVie Stock Quote
$163.72 (-0.13%) $0.22

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