Regenxbio's Gene Therapy Prospects Face Uncertainty Amid Growing Competition

Goldman Sachs has recently downgraded Regenxbio Inc (NASDAQ:RGNX) due to concerns about the market appeal of its gene therapy treatment, ABBV-RGX-314, especially in the context of wet Age-Related Macular Degeneration (AMD) and diabetic retinopathy. The analyst expressed that the efficacy of gene therapies in these areas may not be compelling enough, given that most patients are elderly and that newer anti-VEGF treatments are available with longer-lasting effects and lower costs.

According to Goldman Sachs analyst Paul Choi, ABBV-RGX-314, in partnership with AbbVie Inc, is facing increasing competition, particularly because of its invasive delivery method, which could make it less appealing compared to alternative therapies. This raises uncertainties about the drug's commercial viability.

The pivotal trials known as ATMOSPHERE and ASCENT, which are set to evaluate the safety and effectiveness of the subretinal delivery of ABBV-RGX-314 for wet AMD, are expected to produce data by 2026. Meanwhile, AbbVie and Regenxbio are preparing a Phase 3 clinical program focusing on diabetic retinopathy using a suprachoroidal delivery method.

As a result of these factors, the analyst has downgraded Regenxbio's stock rating from "Buy" to "Neutral" and has significantly reduced the price target from $38 to $14.

Goldman Sachs also noted that there are other competing treatments advancing through clinical tests, including EyePoint Pharmaceuticals Inc.'s Duravyu, which is an intravitreal insert for vorolanib that recently presented top-line results from a six-month study.

The analyst believes that the overall attractiveness of gene therapies for retinal diseases is diminishing. This leads to a lower estimated market share for these treatments, subsequently reducing the projected peak sales for ABBV-RGX-314.

As more patients begin to utilize competing treatments, Choi predicts that prices will continue to decrease, which could create a lower pricing benchmark for ABBV-RGX-314 as it approaches market readiness.

In addition, the analyst pointed out the rising popularity of Regeneron Pharmaceutical Inc’s 2 mg Eylea biosimilars, which have begun to capture market share from the branded Eylea, despite the availability of the Eylea HD version.

On another note, Goldman analyst Choi finds the current data on RGX-202, a gene therapy for Duchenne muscular dystrophy, promising, although somewhat limited. Choi highlights the growing necessity for improved treatment options, evidenced by heightened interest in Sarepta Therapeutics Inc’s Elevidys as well as strong enrollment figures in Edgewise Therapeutics’ FOX study for post-gene therapy care.

Recently, Regenxbio entered into a strategic collaboration with Nippon Shinyaku to develop and commercialize RGX-121, aimed at treating Mucopolysaccharidosis II (Hunter syndrome), and RGX-111, targeting Mucopolysaccharidosis I (Hurler syndrome). This partnership will see Regenxbio receiving an upfront payment of $110 million, with potential additional milestone payments totaling up to $700 million, which includes $40 million for development and regulatory achievements, and $660 million contingent on sales milestones.

Price Action: Following these developments, RGNX shares saw a decline of 7.29%, currently trading at approximately $7.31.

Regenxbio, GeneTherapy, Downgrade