Abeona's Skin Genetic Treatment Moves To Phase 3 Trial

–Abeona Therapeutics (NASDAQ:ABEO) is on the path to speed up its EB-101 gene therapy interventional study to a Phase 3 clinical trial.
The US Food and Drug Administration recommended on Tuesday (July 18) moving the company’s gene therapy forward for patients with the rare skin disease recessive dystrophic epidermolysis bullosa (RDEB), which was given the option to begin early next year. Abeona is still discussing the details of this upcoming trial with the FDA.
EB-101 showed close to perfect results from the Phase 1/2 stage of its trial in various patient groups –which evaluated for different time intervals– all showed wound healing with over 80 percent success. This treatment has already received an orphan drug designation from both the FDA and the European Medicines Agency (EMA).

“We are grateful that the FDA has recognized EB-101 as a rare disease product that addresses the underlying disease pathology to offer significant therapeutic benefit for RDEB,” Dr. Timothy Miller, CEO of Abeona said in the company’s press release.

Perspective from analysts

In a note to investors Jefferies, equity analyst Maury Raycroft gave ABEO a ‘Buy’ recommendation following the announcement and the updates expected throughout the rest of 2017.
“We are currently modeling the program entering the market in 2019 with peak revenues of $107 [million]… We acknowledge our peak revenue estimate could be conservative depending on pricing and the ultimate treatment paradigm,” Raycroft wrote.
The report indicated the FDA guidance falls in line with the timeline for when the candidate would hit commercialization.
Maxim Group said that while they assume pricing per procedure to be $100,000 and for each patient to be able to get one procedure at a time, their estimation could be low and patients could get “multiple grafts.”
“In gene therapy, proof of concept can come with N = ‘not that many.’ We believe that much of investor focus has been on Sanfilippo Syndrome and as such see the RDEB program as undervalued and a potential value driver for the company,” the note read.
The note, co-authored by Jason McCarthy, Jason Kolbert and Gabrielle Zhou, raised the price target for Abeona from $14 to $17.
So far in 2017, Abeona has enjoyed a steady increase.Year-to-date, the company’s stock has increased an impressive 84.54 percent. During after hours of trading on Tuesday,  the company’s stock is priced at $8.95.

Investor Takeaway

As indicated by the researchers at Maxim, a proof of concept trial in gene therapy is rare. The announcement also signals a change from the FDA regarding their intentions to get treatments and therapies tested faster.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.