biotech stocks interior therapeutics (NTLA 5.18%) It has fallen about 33% in the past 30 days amid the release of some new data from early-stage clinical trials on November 16th and the release of third-quarter earnings on November 7th. Usually updates like these two will have a positive effect. Assuming there is good news to share, it drives the stock price higher.
In this case, there was exactly nothing bad However, it is clear that the company’s stock is still recovering from the damage it suffered in October, when clinical results for some of its gene-editing programs against hereditary angioedema (HAE) were less favorable against rival candidates. is.
So is this stock still worth buying, or are there problems that are starting to accelerate?
Don’t be fooled by the market
First, let’s take a look at the latest information produced by this biotech to see if there is any clearly bearish information.
Intellia’s investigational gene editing therapy, called nex-z (previously known as NTLA-2001), is treating a rare, progressive, and ultimately fatal disease called transthyretin amyloidosis (ATTR amyloidosis). Intended to treat or cure genetic diseases. Nex-z permanently edits a patient’s genes to correct the problem that causes the disease, making it a one-time intervention with lasting results. This is also one of Intellia’s flagship programs and is currently enrolling patients in a Phase 3 clinical trial, with another Phase 3 clinical trial expected to begin by the end of this year.
But because the therapy directly edits a patient’s genes, the company is obligated to follow a lengthy timeline for safety testing, which would require following patients for a significantly longer period of time in the initial Phase 1 trial. It means that. This also opens the door to a sneak peek at long-term efficacy data in small cohorts of patients from these trials.
According to the company’s update on the Phase 1 trial on Nov. 16, for 11 of the 36 patients in the study, nex-z lowered levels of the circulating protein responsible for ATTR symptoms by an average of 89%. It appeared to be very effective in reducing %. Continue without additional doses for at least 24 months. For other patients in the trial, sufficient time has not yet passed to qualify for a 24-month follow-up appointment. However, follow-up studies to date have shown no evidence of ATTR recurrence. So, presumably, the 24-month efficacy data will be good as well.
Intellia would like to note that these data show that NEX-Z can alter the course of the disease to the benefit of patients, perhaps by slowing or stopping disease progression. I am. Nevertheless, nex-z’s safety data has been somewhat disappointing, which may be one of the motivations for investors to sell the stock.
Although these problems were not proven to be related to the treatment itself, a small number of patients still experienced cardiovascular problems such as heart failure after treatment. One explanation for this is that ATTR amyloidosis gradually harms a patient’s body over time, so treatment with nex-z only halts further damage and cures previously accumulated harm. It may not be possible and it may not be designed that way.
In other words, the market’s expectations for NEX-Z’s performance may be unrealistic, even though it remains a strong possibility that NEX-Z is a cure for the condition it seeks to address.
There may still be major pitfalls
If commercialized, nex-z could potentially reach a market of as many as 550,000 people worldwide with ATTR and its various subtypes, and the market for interventions for this condition could grow to 110 million patients per year by 2029. Intellia believes it could be worth more than $1 billion.
Even if they can capture 5% of the market and hold it for a few years, nex-z will quickly become a blockbuster drug, dramatically increasing the biotech’s current sales revenue to $0. The fact that the program’s early data continues to suggest things are going well should give investors confidence that late-stage trials are likely to be successful.
Additionally, Intellia had $944.7 million in cash, equivalents, and marketable securities as of the third quarter. Management believes it should have enough capital to operate at current momentum through the second half of 2026, given expected inflows from partnerships. This estimate is reasonable, as total operating expenses for the first three quarters of 2024 were $442.8 million. Even if NEX-Z needs to raise more money to launch, it shouldn’t be too difficult to do so if it continues to generate positive clinical data.
Of course, there is no guarantee that the program will be easy to commercialize. U.S. Food and Drug Administration (FDA) regulators will scrutinize its safety data very carefully, given the seriousness of making permanent changes to a patient’s genome. Therefore, the likelihood that regulators will require more comprehensive safety data is higher than for most other biotechnology candidates.
Still, the recent decline in Interior’s stock price appears to be an overreaction. The company currently has no significant impairments that did not exist in the past 30 days. If you tend to bet on biotech stocks that carry a fair amount of risk, this stock is a good candidate to buy on the spur of the moment and hold for at least a few years. That way you have plenty of time to make a move on either stock. Bring the program to market.
