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Gene Therapy Restoring Light Sensitivity 'Showed Impressive Dose-Response Improvements'
Research Report

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Roth Capital Partners advised that Applied Genetic Technologies co-development of BS01 with Bionic Sight "validates its gene therapy capabilities."

In a March 31 research note, ROTH Capital Partners LLC research analyst Zegbeh Jallah reported that Applied Genetic Technologies Corp. (AGTC:NASDAQ), a clinical-stage biotechnology company engaged in developing gene therapy products for inherited orphan ophthalmology diseases, has co-developed gene therapy that restores sensitivity in blind retinitis pigmentosa (RP) patients. Jallah advised that RP is an inherited retinal disease caused by degenerating photoreceptors.

The analyst stated that AGTC's collaborative partner Bionic Sight recently announced that its "Phase 1/2 study of BS01 showed that 4/4 patients with Retinitis Pigmentosa (RP) can now detect light, and 2/4 can detect motion, which we find impressive as these patients were nearly/completely blind."

AGTC owns a 15% equity stake in Bionic Sight and its role in the BS01 study was to supply expertise in the areas of vector design, manufacturing and preclinical optimizations. ROTH Capital Partners believes "AGTC's co-development of BS01 validates its gene therapy capabilities and is lucrative given its 15% equity stake in Bionic Sight."

The report explained that "BS01 is an optogenetic AAV gene therapy that is being developed for severe or advanced RP patients...that when activated by light, BS01 increases cellular activity and sends signals to the brain to restore visual function, using a retinal decoding algorithms."

The report indicated that the Phase 1/2 trial is a dose escalation study of BS01 in patients diagnosed with advanced RP with near to complete vision loss. Initial results from the study reportedly "showed impressive dose-response improvements in light and motion sensitivity in treated patients." Bionic Sight now plans to continue dose escalation in the current group of four patients and enroll 16 additional patients.

ROTH Capital Partners stated that "the dose-response was remarkable in our opinion as the lowest dose induced a 20-fold increase in light sensitivity and the higher dose (3x lowest) induced a 100-fold increase in sensitivity."

Jallah commented that in addition to its 15% equity position in Bionic Sight, AGTC also holds an option exercisable for a limited time only to acquire a majority equity interest in Bionic Sight's assets in the collaboration, or the rights to the commercial product. The analyst noted, "We view this as particularly attractive since AGTC's pivotal XLRP study will exclude RP patients with lower baseline sensitivity, which BS01 could capture, expanding the addressable market."

The analyst stated that ROTH Capital Partners has a "Buy" rating for Applied Genetic Technologies with a 12-month price target price of $35/share. Applied Genetic's shares are currently trading at around $4.55.


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Disclosures from ROTH Capital Partners, Applied Genetic Technologies Corporation, Company Note, March 31, 2021

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Within the last twelve months, ROTH has received compensation for investment banking services from Applied Genetic Technologies Corporation.
ROTH makes a market in shares of Applied Genetic Technologies Corporation and as such, buys and sells from customers on a principal basis.
Shares of Applied Genetic Technologies Corporation may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
Within the last twelve months, ROTH has managed or co-managed a public offering for Applied Genetic Technologies Corporation.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

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