Gene therapy has emerged as a hot trend in the biotech space over the last few years. These therapies aim to treat diseases by essentially inserting a gene into a patient’s cells rather than treating them via drugs or surgery. The stocks of companies focused on this space have seen a mixed performance recently. Companies that have been able to deliver compelling results have been acquired by big pharma companies (for instance, Spark Therapeutics was acquired by Roche), while others have underperformed, due to large R&D investments and delays in launching revenue-generating products.
Overall, the economics of the business remains uncertain, as gene therapies are largely focused on diseases that have no other treatments and the business is complex, given the limited volumes, challenging manufacturing, and highly-customized treatment process. Moreover, only a handful of gene-based therapies have been approved for use in the U.S. thus far, and treatments can cost hundreds of thousands or even a few million dollars, causing resistance from insurance companies and government-backed healthcare programs.
Our indicative theme of U.S. listed Gene Therapy Stocks is down by about 15% year-to-date, underperforming the broader S&P 500 which is down by 13%. In comparison, the S&P Pharmaceuticals Select Industry Index has outperformed the S&P 500, falling by just 8%, as investors bet on companies working on coronavirus vaccines and therapies. Below, we take a look at some interesting names in the gene-based therapy space.
Sarepta Therapeutics (-1% YTD, $10 billion market cap) – is a commercial-stage biopharmaceutical company that develops RNA-targeted therapeutics and gene therapy products. The company’s current commercial products are focused on the treatment of Duchenne muscular dystrophy. Sarepta posted revenues of about $380 million in 2019, although its growing R&D expenses meant that net losses stood at over $700 million.
Regenxbio (-9% YTD, $1.4 billion market cap) – is a clinical-stage biotechnology company working on gene-based therapies for Retinal diseases, Hunter and Hurler syndromes. The company’s technology is focused on AAV vectors, which uses modified viruses to deliver the therapy and the company has partnerships with many big pharma names including Pfizer PFE and Novartis. The company revenues, which primarily comprise of license and royalty payments, declined from $219 million in 2018 to about $35 million in 2019.
UniQure (-21% YTD, $2.5 billion market cap) – The company’s lead program is focused on a gene-based therapy for Hemophilia and is currently in the late-stage of clinical trials and another program focuses on Huntington’s disease, which has started phase 1 and phase 2 trials. The clinical-stage biotechnology company posted revenues of $7 million in 2019.
Are treatments, vaccines or testing stocks the best way to play the coronavirus recovery? View our indicative themes of Coronavirus Vaccine Stocks, Coronavirus Treatment Stocks, and Coronavirus Testing Stocks for more details on the stock price and fundamental performance of some of the key U.S. listed companies.