Illinois-based biopharmaceutical company AbbVie (ABBV) and Maryland-based biotechnology firm RegenXBio (RGNX) have partnered for the development and sale of RGX-314, a novel one-time gene therapy for wet age-related macular degeneration (AMD), diabetic retinopathy (DR) and other chronic retinal diseases.
Following the announcement of the news, RegenXBio’s shares jumped 31.2% to close at $43.40 on Monday. However, the shares slipped 1.2%, at the time of writing, in early trade on Tuesday. (See RegenXBio stock chart on TipRanks)
Currently, RGX-314 is being evaluated in two separate Phase II clinical trials in patients with wet AMD and DR and in a pivotal trial in patients with wet AMD. While the Phase II trials are utilizing in-office suprachoroidal delivery, the pivotal trial is utilizing subretinal delivery.
Under the terms of the agreement, RegenXBio will complete the ongoing trials of RGX-314. Both the companies will share the costs of additional trials of the therapy, including the planned second pivotal trial utilizing subretinal delivery for the treatment of patients with wet AMD.
Furthermore, AbbVie will lead the clinical development and global commercialization of RGX-314, and RegenXBio will take part in U.S. commercialization efforts. The transaction is likely to close by the end of the year. (See AbbVie stock chart on TipRanks)
The President and CEO of RegenXBio, Kenneth T. Mills, said, “We expect to leverage AbbVie’s global developmental and commercial infrastructure within eye care with our expertise in AAV gene therapy clinical development and deep in-house knowledge of manufacturing and production to continue the development of RGX-314.”
As per the agreement, RegenXBio will receive an upfront payment of $370 million from AbbVie. Additionally, RegenXBio can get up to $1.38 billion in commercial, regulatory and development milestone payments.
The companies will equally share the profits from net sales of RGX-314 in the U.S., and on net sales made outside the U.S., AbbVie will make tiered royalty payments to RegenXBio.
Last week, J.P. Morgan analyst Chris Schott maintained a Buy rating on AbbVie with a price target of $140 (29.8% upside potential). The analyst said, “The recent AbbVie share pullback is an opportunity to revisit the best risk/reward story in the group.”
Overall, the stock has a Strong Buy consensus rating based on 11 Buys and 2 Holds. The average AbbVie price target of $128.15 implies 18.9% upside potential. The company’s shares have gained 18.8% over the past year.
According to TipRanks’ Smart Score rating system, AbbVie scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
On September 13, Chardan Capital analyst Geulah Livshits reiterated a Buy rating on RegenXBio with a price target of $100 (125.6% upside potential). The analyst expects the company to report a loss of $1.36 per share in the third quarter.
Overall, the stock has a Moderate Buy consensus rating based on 3 Buys and 2 Holds. The average RegenXBio price target of $62.50 implies 44% upside potential. Shares of the company have gained 51.4% over the past year.