In an April 30 research note, analyst Joseph Pantginis reported that H.C. Wainwright & Co. initiated coverage on Sio Gene Therapies Inc. (SIOX:NASDAQ) with a Buy rating and an $8 per share target price. In comparison, its current share price is about $2.62.
Pantginis described the pharmaceutical company and its pipeline of potential therapeutics.
Sio develops lentivirus- and adeno-associated-virus-based therapies, the purpose of which is to permanently modify genes involved in various neurologic diseases, including Parkinson's in adults and GM1 gangliosidosis and GM2 gangliosidosis (Tay-Sachs and Sandhoff) in pediatric patients, the analyst relayed.
The company's most advanced gene therapy is AXO-Lenti-PD, designed to "provide a durable solution to neurocognitive decline for those diagnosed with [Parkinson's disease]," Pantginis indicated. He highlighted that AXO-Lenti-PD could meet the need for a new therapy and that its potential is "blockbuster" in scope. Given that 1 million people in the U.S. have Parkinson's disease and another 60,000 people are diagnosed with it each year, the market size is big.
Also, Pantginis pointed out, AXO-Lenti-PD has three clear advantages over other treatments, because it is a viral vector-based gene therapy. One, only a single dose should be needed to restore gene function. Two, the therapy provides a permanent solution, because the resulting gene expression is stable and durable. Three, because lentiviral vectors are not new, the regulatory risk surrounding therapies based on them is greatly reduced. Thus, advancement through clinical trials should be efficient and quick.
The available AXO-Lenti-PD data are positive, Pantginis added. Results from the SUNRISE-PD, Phase 2 dose-escalation study in Parkinson's disease patients showed the therapeutic to be safe and well tolerated. Also, patients reported significant benefit from AXO-Lenti-PD, even at suboptimal doses.
"These results are indicative of AXO-Lenti-PD's differentiated capacity to treat and stabilize [Parkinson's disease] symptoms, especially compared to L-DOPA supplementation," the current standard of care, Pantginis wrote.
Pantginis discussed two other candidates in Sio's pipeline: AXO-AAV-GM1 and AXO-AAV-GM2. The company intends for these adeno-associated-virus-based gene therapies to prevent neurologic decline in pediatric patients, from infants to juveniles. Currently, no such treatments exist.
"This, coupled with the growing incidence of [Parkinson's disease] in aging populations globally, not only establishes a compelling clinical justification but outlines a clear target market population with substantial commercial opportunity that provides what we think is a meaningful advantage over current and future competitors in the space," Pantginis wrote.
As for clinical progress, AXO-AAV-GM1 is currently being tested, in a two-stage, Phase 1/2 study, on both Types 1 and 2 GM1 gangliosidosis. In the second stage, efficacy of the dose determined in Phase 1 will be measured. The next set of results, an update on patients getting the low dose along with results of a biomarker analysis, is anticipated by mid-2021. Full, 12-month topline data are expected by year-end 2021.
Regarding AXO-AAV-GM2, the U.S. Food and Drug Administration granted it two designations, rare pediatric disease and orphan drug, in October 2020. Sio has started an open-label, two-stage, Phase 1/2 trial of the therapy, which it is conducting in a manner similar to that for AXO-AAV-GM1. Already one patient has been treated.[NLINSERT]
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Disclosures from H. C. Wainwright, Sio Gene Therapies, Inc., Coverage Initiation, April 30, 2021
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Joseph Pantginis, Ph.D. and Emanuela Branchetti, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst's household has a financial interest in the securities of Sio Gene Therapies, Inc., Arena Pharmaceuticals, Inc. and Oxford Biomedica PLC (including, without limitation, any option, right, warrant, future, long or short position).
As of March 31, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Sio Gene Therapies, Inc., Arena Pharmaceuticals, Inc. and Oxford Biomedica PLC.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The firm or its affiliates received compensation from Arena Pharmaceuticals, Inc. for non-investment banking services in the previous 12 months.
The Firm or its affiliates did not receive compensation from Sio Gene Therapies, Inc., Arena Pharmaceuticals, Inc. and Oxford Biomedica PLC for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Principia Biopharma, Inc. during the past 12 months.
The Firm does not make a market in Principia Biopharma, Inc. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.