The COVID-19 pandemic has triggered a renewed interest among investors in healthcare stocks. Such companies include gene therapy companies, which have been in the spotlight recently. Gene therapy is a technique that aims to modify genes to treat or cure disease.
Among such companies, uniQure N.V. (NASDAQ: QURE), a gene therapy company, is using its modular technology platform to advance a pipeline of adeno-associated virus (AAV)-based gene therapies for the treatment of patients with severe genetic diseases of the central nervous system (CNS) and liver, including clinical programs in hemophilia B and Huntington’s disease, as well as preclinical candidates in Fabry disease, Alzheimer’s diseases and Parkinson’s.
Q2 Results
Earlier this week, the company reported its Q2 results, which topped analysts’ expectations. Earnings came in at $8.51 per share, surpassing consensus estimates of $2.96. Notably, uniQure reported a loss of $0.96 per share in the same quarter last year. QURE posted revenues of $463.9 million versus $1.5 million in the same period last year, beating consensus estimates of $190.02 million.
The huge jump in revenues was a result of licensing revenues of $462.4 million recognized as a result of the CSL Behring Agreement. In June last year, QURE entered into a commercialization and license agreement with CSL Behring.
As a part of this agreement, CSL Behring will receive exclusive global rights to uniQure’s investigational gene therapy, etranacogene dezaparvovec (EtranaDez), for patients with hemophilia B. As a result of this agreement, QURE has received $450 million in upfront cash payment and another $12.4 million related to the license transfer so far.
Following the Q2 results, H.C. Wainwright analyst Patrick Trucchio is bullish, and has a Buy rating and a price target of $90 (210.2% upside) on the stock.
The analyst commented, “Broadly, the lead programs, EtranaDez in HB and AMT-130 in Huntington’s disease (HD), remain on track with multiple potential positive events expected in 2H21 and 1H22 that could further validate the pipeline.”
Now, let’s take a look at these lead programs.
BLA for EtranaDez
In June this year, QURE announced initial 52-week post-administration Factor IX data and annualized bleeding rates (ABR) in the HOPE-B pivotal trial of etranacogene dezaparvovec in severe to moderately severe hemophilia B patients.
This data indicated that in the 52-week time period after receiving the dose, there was an 80% reduction in total bleeding events in patients requiring treatment and a 96% decline in annualized usage of FIX replacement therapy. (See uniQure stock chart on TipRanks)
All the patients enrolled in the trial are expected to have their 78-week follow-up visits by the end of the third quarter of this year, and the company anticipates submitting a Biologics License Application (BLA) in the first quarter of next year.
Analyst Trucchio commented, “We continue to model the potential launch of EtranaDez in late 2022 and anticipate it could become the leading gene therapy treatment in a HB [hemophilia B] market we estimate could generate aggregate revenues of around $40B.”
Furthermore, the analyst pointed out that QURE is eligible “to receive up to $1.6B in additional payments based on regulatory and commercial milestones, as well as tiered double-digit royalties in a range of up to a low-twenties percent of sales, implying significant potential future upside for QURE shareholders from the HB collaboration, in our view.”
AMT-130
QURE’s clinical development of AMT-130, for the treatment of Huntington’s disease, is also progressing well. In June this year, the company announced that it had completed the first two patient enrollment procedures in the second dose cohort of the Phase 1 clinical trial.
The enrollment procedures of the next two patients are likely to be held in Q3.
Analyst Trucchio was optimistic about this clinical trial, stating, “Overall, we look forward to the imaging data on the first four patients expected around the end of 2021, which could demonstrate the first evidence that uniQure’s differentiated approach is, in fact, being translated successfully from the minipig model, the largest diseased animal model available for humans.”
Pipeline Expansion for uniQure?
In June this year, uniQure announced the proposed acquisition of Corlieve Therapeutics for €46.3 million in cash. The acquisition, which is expected to close in the third quarter of this year, is projected to strengthen QURE’s pre-clinical pipeline.
Corlieve’s gene therapy program, expected to be called AMT260, employs miRNA (micro RNA) silencing technology to suppress kainate receptors in the hippocampus of patients with temporal lobe epilepsy (TLE).
Moreover, according to Trucchio, in June this year, the company also announced “new investments in its gene therapy pipeline focusing on the central nervous system and rare, liver-directed disorders…” According to the analyst, this expansion of pipeline could further generate the “next leg of upside” on the stock.
The analyst has valued the stock using a discounted cash flow (DCF)-based and sum-of-the-parts (SOTP)-based methodology. On the basis of his analysis, he has assigned a probability of 90% success to EtranaDez and a 30% chance of success to AMT-130.
Turning to the rest of the Street, consensus is that QURE is a Strong Buy, based on 10 Buys and 1 Hold. The average uniQure price target of $65.56 implies a 126% upside potential to current levels.
Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.
