Shares in biopharmaceutical company Precigen (PGEN) rocketed higher today after the U.S. Food and Drug Administration gave the green light to a therapy to treat a rare respiratory disease.
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The approval of the therapy, called Papzimeos, is the first treatment for the condition to receive the health regulator’s nod.
Fatal Tumors
Papzimeos has been approved to treat recurrent respiratory papillomatosis (RRP) — a condition that causes growth of wart-like tumors in the respiratory tract due to human papillomavirus (HPV) infection.
RRP can lead to severe voice disturbance, a compromised airway, and recurrent post-obstructive pneumonias. Precigen estimates that there are about 27,000 adult RRP patients in the U.S.
RRP can be fatal as there is no cure and the current standard-of-care is repeated surgeries. However, despite being removed in these surgeries, the growth has a tendency to return.
“For more than a century, since RRP was first recognized as a distinct disease, patients have had to rely on repeated surgeries to manage this relentless condition. Today marks a historic turning point. With the landmark FDA approval all adult RRP patients are now eligible for access to the first and only approved therapy that targets the root cause of the disease,” said Helen Sabzevari, PhD, President and CEO of Precigen.
Analyst Upgrade
Simon Best, associate professor of Otolaryngology at Johns Hopkins Hospital, added: “Everybody is anxiously awaiting a new treatment for this disease. The patients are and the surgeons are. There’s nothing more frustrating than doing a surgery and then having the patient come back six months later.”
The approval was based on an early-to-mid-stage study data that showed 51% of patients required no surgeries in the 12 months after the treatment.
J.P.Morgan upgraded Precigen to Neutral from Underweight on the news. It cited the removal of Precigen’s “major regulatory overhang” and its revenue potential for the upgrade. It estimates that peak sales for the drug in the U.S. to be about $250 million.
Precigen is certainly making strides when it comes to its financials – as can be seen below.
Precigen recently reported a Q2 net loss of $26.6 million, a significant improvement from the $58.8 million loss in the same period last year. Total revenues for the quarter were $856,000, up from $717,000 in the previous year, driven by increased service revenues.
Is PGEN a Good Stock to Buy Now?
On TipRanks, PGEN has a Hold consensus based on 2 Buy, 1 Hold and 1 Sell ratings. Its highest price target is $6. PGEN stock’s consensus price target is $4.50, implying a 143.24% upside.
