Shares of biotechnology company Beam Therapeutics (BEAM) have climbed almost 8% since the company reported its second-quarter results on August 10. The company expects to submit the first investigational new drug application (IND) for BEAM-101 (being developed for treating sickle cell disease and beta-thalassemia) in the second half of 2021.
Let’s take a look at Beam Therapeutics’ financial performance and see what has changed in its key risk factors that investors should be aware of.
Beam Therapeutics develops precision genetic medicines to target serious diseases. Its platform for precision medicines includes gene editing and delivery technologies. Beam is also in the process of setting up a 100,000 square foot internal manufacturing facility, which is expected to be operational in 2023.
The CEO of Beam Therapeutics, John Evans, said, “With the initiation of IND-enabling studies for BEAM-201, we are now bringing the versatility and precision of base editing to a second therapeutic area, targeting the high unmet need in T-cell cancers with the first quad-edited cell therapy…With a strong balance sheet, we are well-positioned to advance our robust pipeline of novel base editing programs through IND filings and into the clinic as we strive to provide potentially life-long cures for patients suffering from serious diseases.”
During Q2, Beam earned license revenue of $6 thousand, missing estimates by $8.33 million. During this period Beam saw an increase in both R&D and G&A expenses. R&D expenses jumped to $45.6 million versus $19.4 million a year ago. G&A expenses increased to $13.4 million from $6.9 million a year ago.
Its net loss per share at $1.23 was wider than the Street’s estimates by $0.49. The company had reported a net loss per share of $0.69 a year ago. (See Beam Therapeutics stock chart on TipRanks)
Importantly, the company is going to present data from sickle cell disease program at Cold Spring Harbor Laboratory’s Genome Engineering: CRISPR Frontiers conference on August 20.
On August 10, William Blair analyst Raju Prasad reiterated a Buy rating on the stock but did not assign any price target.
Prasad said, “Beam has demonstrated the potential of the company’s base-editing technologies across several disease types to date. We are optimistic about a high translatability of the preclinical data from BEAM-101 and BEAM-102 to clinical responses given the demonstrated clinical translation of other gene therapies for SCD…We believe additional preclinical data, IND submissions, and potential additional business development will be the next major catalysts for the stock.”
Based on 2 Buys and 2 Holds, consensus on the Street is a Moderate Buy. The average Beam Therapeutics price target of $116 implies 7.4% upside potential. Shares are up 29.9% so far this year.
Now, let’s look at what has changed in the company’s key risk factors.
According to the new Tipranks’ Risk Factors tool, Beam Therapeutics’ main risk category is Tech & Innovation, which accounts for 35% of the total 79 risks identified. Since June, the company has changed two key risk factors.
Under the Tech & Innovation category, Beam notes that its owned and in-licensed patents, patent applications, and other intellectual property may be subject to disputes or similar proceedings. If Beam or its licensors are not successful in any of these proceedings then the company may be required to obtain licenses from third parties, which may not be available or on financially reasonable terms. In such a scenario, Beam may have to cease the development of its product candidates, which can adversely impact it.
Under the Production category, Beam acknowledges that if any of its product candidates or their modes of administration cause adverse events or side effects then it could delay or prevent regulatory approvals for the products. Such a scenario may limit the commercial potential or lead to major negative consequences post any potential marketing approval.
The Tech & Innovation risk factor’s sector average is at 26%, compared to Beam Therapeutics’ 35%.
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