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Orchard Collaborates with Pharming Group on HSC Gene Therapy; Street Sees 204% Upside

Gene therapy developer Orchard Therapeutics (ORTX) is collaborating with commercial-stage biopharmaceutical company Pharming Group (PHAR) to develop and bring to market OTL-105, a hematopoietic stem cell (HSC) gene therapy for treating hereditary angioedema (HAE).

HAE is a rare, life-threatening disorder characterized by swelling attacks in the face, throat, extremities, and abdomen. According to Orchard, the HAE market, which is growing at 8% annually, is expected to garner sales of about $2 billion in 2021.

Under the agreement, Orchard has granted global rights of OTL-105 to Pharming. Orchard will oversee IND-enabling activities and manufacturing of the therapy during pre-clinical and clinical development. In consideration, Orchard will receive an upfront payment of $17.5 million and may receive a further $189.5 million in development, regulatory, and sales milestones. Furthermore, it may also get royalties on future global sales of the therapy in the mid-single to low double-digits.

Orchard Therapeutics CEO Bobby Gaspar, M.D., Ph.D., said, “This collaboration demonstrates the promise of the HSC gene therapy platform and how it can be applied to new therapeutic areas with larger patient populations. We believe the HSC gene therapy pipeline we are building could continue to be a source of future partnerships in areas where the biology supports our approach.” (See Orchard Therapeutics stock chart on TipRanks)

On June 29, Oppenheimer analyst Kevin DeGeeter reiterated a Buy rating on the stock but decreased the price target to $15 (241.7% upside potential) from $17.

DeGeeter sees Orchard evolving into a “Fully integrated biopharmaceutical company focused on the lentiviral vector (LVV)-based gene therapies to treat rare and ultra-rare diseases.”

Based on 4 unanimous Buys, consensus on the Street is a Strong Buy. The average Orchard Therapeutics price target of $13.33 implies 203.6% upside potential. Shares are flat so far this year.

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