Chardan Analyst: Gene Therapy Stocks Start their Long Ride to the Upside – The Wall Street Transcript

October 1, 2021

Geulah Livshits, Ph.D., Senior Research Analyst, Chardan

Geulah Livshits, Ph.D.,is a Senior Research Analyst at Chardan covering biotech companies with a focus on gene editing and oncology.

Dr. Livshits joined Chardan in the spring of 2018, after a career as an academic scientist. Prior to joining Chardan, Dr. Livshits was a Postdoctoral Research Fellow in the laboratory of Dr. Scott Lowe at Memorial Sloan Kettering Cancer Center, where she developed CRISPR and RNAi approaches to study pancreatic cancer in vivo and in organoid models. Dr. Livshits conducted her thesis research in the laboratory of Dr. Elaine Fuchs at The Rockefeller University, where she studied mechanisms of skin development and regeneration.

Her doctoral and postdoctoral work has been published in peer-reviewed academic journals includingNature,Nature Medicine,Nature Biotechnology,eLife,PNAS, andHuman Gene Therapy. Dr. Livshits received her B.S. from Brandeis University, her Ph.D. from The Rockefeller University, and was a Postdoctoral Research Fellow at Memorial Sloan Kettering Cancer Center.

In this 2,929 word interview, exclusively in the Wall Street Transcript, Dr. Livshits describes the current highlights for the sector and recommends her top stock prospects for investors.

Its been exciting to see that start to play out over the past several years with Novartis(NYSE:NVS) acquisition of AveXis back in 2018, and Zolgensmas subsequent rollout in spinal muscular atrophy, which enabled kids to retain mobility. And more recently the authorization ofModernas(NASDAQ:MRNA) COVID-19 vaccine and the similar vaccine fromPfizer(NYSE:PFE) andBioNTech(NASDAQ:BNTX) have now been deployed to millions of people and are saving lives as we speak.

And were now starting to see clinical signals with gene editing as well. First, a few years ago for engineered cell medicines from companies likeAllogene(NASDAQ:ALLO),Cellectis(NASDAQ:CLLS), andCRISPR Therapeutics(NASDAQ:CRSP), and more recently, withIntellia Therapeutics(NASDAQ:NTLA) reporting initial data for CRISPR editing in the body. So its an exciting time for innovation in biotech overall and genetic medicines in particular. Im happy to be part of that.

The Chardan analyst Geulah Livshits opines that the pace of clinical trials has picked up and has created significant investment opportunities.

Within the areas of genetic medicines that we focus on, from a big picture standpoint, the past year has been a big year for CRISPR gene editing; its discovery was awarded the Nobel Prize last October. And then this summer, we saw the first human data where the CRISPR enzyme was delivered inside the body. Again, the program was from Intellia Therapeutics, and that was very promising.

Initial biomarker results suggested that the drug was doing what they would expect it to be doing based on what was shown in animal studies. And weve also seen an increasing durability of effects in a cell therapy program fromCRISPR TherapeuticsandVertex(NASDAQ:VRTX) for sickle cell disease.

Its important to keep in mind that this field is still in its early stages, but were seeing signals that for example, withIntelliasdata, gene editing works in humans at levels that would correspond to clinically meaningful results.

More generally, an important point is that were seeing good translation from preclinical, either animal or cell culture models, which provides some de-risking to the technologies that are involved. And that creates broader tailwinds for the space and increased enthusiasm in gene editing that we have seen.

Its notable that withIntelliasprogram, the editing uses a technology similar to the mRNA vaccines from the COVID space. Its an example of using two different innovative technologies, both of which had a big year. So we expect to see more of such combinations of innovative technologies going forward.

Gene editing can also be combined with other modes of delivery, including AAV viral vectors. And those have been the predominant technology of choice to deliver gene therapies inside the body.

EditasMedicine (NASDAQ:EDIT) is using an AAV approach to deliver CRISPR enzyme to treat inherited retinal disorder and will be reporting initial human data at the end of this month, which also will be an important catalyst in the space. AndLogicBio Therapeutics (NASDAQ:LOGC) is advancing nuclease-free genome editing therapy for a pediatric metabolic disease, and also plans to report initial data at the end of the year.

Chardan analyst Dr. Geulah Livshits is also a big promoter of gene editing companies:

In terms of upcoming important data readouts, as I mentioned, EditasandLogicBioare gene editing companies with near-term catalysts that could drive performance.EDITwill be reporting initial human in vivo editing data at the end of this month. This will be the companys first clinical data readout and the first in vivo editing readout with AAV-delivered CRISPR enzyme in humans.

The interesting thing about this is more that its a proof of concept of the technology platform, rather than necessarily the importance of the market size of the indication itself. Its a rare disease, but we sawIntelliaperform on the back of its initial data readout; we sawCRISPR Therapeuticsperform on the back of its initial data readout. And well have to see what the data look like, but thats an important catalyst for the space as well.

LogicBiois also a gene editing program, but it doesnt use CRISPR technology; its a nuclease-free in vivo editing platform. And theyre currently in the clinic in pediatric patients with methylmalonic acidemia, a metabolic genetic disorder. And valuation there has been lagging also. So we think that theres potential for the stock to bounce back on signals of activity. For example, they have circulating biomarkers that could indicate the presence of editing, and that would again serve as some validation of the platform.

So basically, in the gene editing space, weve seen considerable inflection and value on clinical proof of concept for a technology. And as a new emerging technology, thats something thats been very important. And each of these companies has been advancing slightly different variants of gene editing technology, which is why each time weve been seeing performance on the back of encouraging data.

Chardan is a big promoter of Regenxbio (NASDAQ:RGNX), and Geulah Livshits points out this this stock has an important announcement coming today:

As I mentioned, a number of gene therapy names have lagged behind in performance, and could be at favorable entry points ahead of data. For example, another gene therapy program that is also coming soon at the end of the month is data for Regenxbio (NASDAQ:RGNX).

This company has a broad pipeline of programs that uses a variety of AAV vectors. The lead, the most mature program, is in pivotal studies for wet age-related macular degeneration and diabetic retinopathy. And the company has generated encouraging data using a slightly more invasive surgical approach called subretinal delivery, but theyre also advancing a less invasive in-office approach called suprachoroidal delivery.

So this mode of delivery is important in terms of market penetration. They will start reporting data from patients treated with this less invasive delivery on October 1st.

Get the complete 2,929 word interview, exclusively in the Wall Street Transcript with Dr. Livshits for all of the professional Chardan analyst gene therapy stock recommendations.

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Chardan Analyst: Gene Therapy Stocks Start their Long Ride to the Upside - The Wall Street Transcript