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Exclusive: Applied Genetic's CEO Talks Partnerships, Politics, Pipeline

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Exclusive: Applied Genetic's CEO Talks Partnerships, Politics, Pipeline

In the last year, sell-side analysts have shown confidence in Applied Genetic Technologies Corp (NASDAQ: AGTC) with a series of upgrades and initiations. BMO, Chardan, Janney and Roth all bought into the biotech, and the company has yet to disappoint.

Shares traded under the $3 level a year ago and nearly popped over $10 earlier this month. The stock currently trades around $6.50 a share.

AGTC's Pipeline

At AGTC’s Jan. 28 R&D Day, the biotech reported sustained positive data for its lead candidate XLRP in a Phase 1/2 trial for X-linked retinitis pigmentosa. XLRP is an orphan drug targeting 20,000 patients across the combined U.S. and European markets.

“We’re really concentrating on and moving forward in the next stage, which is the pivotal trial,” AGTC President and CEO Sue Washer told Benzinga.

The company previously reported “signs of biologic activity” from its other candidate, ACHM, in achromatopsia. The indication affects 28,000 patients in the U.S. and Europe.

“Both patient populations are robust patient populations,” the CEO said.

AGTC plans to begin a pivotal trial on XLRP by the end of 2020.

It will expand its ACHM trial with dose escalation and pediatric patients, collect data in the back half of the year and then determine the viability of the program.

AGTC's Strategic Partnerships

The company announced at R&D Day its interest in strategic partnerships for XLRP and ACHR — both in late-stage regulatory negotiation, commercialization and distribution, as well as in earlier development stages.

Washer said M&A activity is “not something we’ve guided for.”

AGTC's Finances

Despite subsequently filing for a $35-million common stock offering, Washer told Benzinga she's comfortable with AGTC’s cash position.

“We have cash running into 2021, and we’ve noted that that is enough cash to complete all work for Phase 1/2 trials and initiate a pivotal trial,” she said.

The company’s November earnings report revealed cash of $16.3 million and current assets of $73.2 million. AGTC will provide fourth-quarter earnings data Feb. 10.

The Political Environment

This year’s presidential election, and all its policy implications, is sure to disrupt the market, but AGTC considers itself to be in a safe spot, Washer said.

“The broad environment is positive,” the CEO said. “There’s been every indication that the FDA is going to be steady in its policies from Scott Gottlieb and the new director of the FDA. So from a development and regulatory framework, we see that there’s probably going to be pretty good consistency.”

Political threats to pharmaceuticals and candidate wars on drug pricing are unlikely to affect AGTC: it's insulated by orphan drug designations.

“The kinds of products we’re working on truly are novel, new products addressing completely unmet needs, and it’s not those kinds of products that are taking the brunt of this issue with cost,” Washer said. “The products we’re talking about developing are taking costs out of the system” by treating conditions that otherwise go untreated, she said.

AGTC Management Changes

AGTC’s chief medical officer left the program in December after a very short tenure. Washer attributed the departure to a less-than-ideal fit and said a new CMO will be hired shortly.

“We wanted to get through data release and get that info out into the industry and then begin the CMO search after,” she said.

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