Applied Genetic Technologies Prepares Offering After Trial Data

January was an up-and-down month for biotech firm Applied Genetic Technologies (AGTC) (NASDAQ:AGTC), with investors reacting both positively and negatively to news.

Although promising results early on led to a significant jump in value for the company, more recent results have caused its shares to decline — and now AGTC is preparing for a new common stock offering.

Last Thursday (January 23), AGTC released interim six month data for dose-escalation patients participating in its Phase 1/2 clinical programs for those with achromatopsia — partial or total loss of color vision — because of a mutation in their ACHM CNGB3 or ACHM CNGA3 genes.

The biotech company closed the trading session this Thursday (January 30) at a share price of US$6.43; the firm has fallen 23.18 percent over the course of the past week.

“We are continuing dose escalation in order to determine the highest safe dose with the potential to provide maximal benefit,” Sue Washer, president and CEO of AGTC, said last Thursday.

Matthew Luchini, an analyst with BMO Capital Markets, called the results from the company’s Phase 1/2 trials for achromatopsia disappointing because of “inconsistency in efficacy.” However, the analyst still expects to see potential upside attached to this treatment.

Luchini’s interest stems from the fact that “three B3 and one A3 patients saw both clinically meaningful improvement and separation from the untreated eye.” He said this result may mean that a longer follow up alongside an increased dose could prove more successful.

As mentioned, January brought both ups and downs for AGTC, and in the first half of the month it had a success story on its hands after it released early data from its Phase 1/2 trial for X-linked retinitis pigmentosa (XLRP). Following the release of the XLRP trial results, shares of the company more than doubled in value. So far in January, the company is trading up 51.18 percent.

XLRP is an inherited eye condition leading to a loss of sight. According to the Genetics Home Reference, patients with XLRP lose their vision because the disorder deteriorates the light-sensing cells of the retina.

“The results show that patients treated centrally with its product candidate demonstrated durable improvement in visual function six months after dosing,” the company said in a statement.

Corporate filings under the US Securities and Exchange Commission show AGTC is gearing up for a new offering. As part of this filing, the company indicated that it plans to meet with the US Food and Drug Administration in Q2 in order to reach a final agreement about an important trial design.

If the design is approved, the company will pursue a key XLRP trial in the back half of 2020.

BMO has assigned a price target of US$16 to the company alongside an “outperform” rating. AGTC holds a “strong buy” rating per analyst data aggregate site TipRanks, based on four reviews.

This Tuesday (January 28), Zegbeh Jallah, an analyst with Roth Capital, kicked off coverage of AGTC with a “buy” rating, according to TipRanks.

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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.