Taysha Gene Therapies Shares Gains over 11% Despite Q4 Miss

Taysha Gene Therapies (NASDAQ: TSHA) shares jumped 9.7% on March 31 and gained a further 2% during the extended trading session, after the company announced positive updates on its strategic pipeline prioritization initiatives, including narrowed research and development (R&D) focus as well as a 35% reduction in its staff.

Investors chose to express their optimism for the long-term upside story while ignoring the current fourth-quarter earnings miss.

Taysha Gene Therapies is a patient-centric, pivotal-stage gene therapy company focused on discovering, developing and commercializing gene therapies for the treatment of monogenic diseases of the central nervous system (CNS) in both rare and large patient populations.

Q4 results

in Q4, the company reported an adjusted loss of $1.32 per share, which fell seven cents short of the street’s estimated loss of $1.25. Further, it was a significant decline over the previous year’s loss of $0.50 per share.

For the full year FY2022, net loss came in at $4.64 per share, compared to a net loss of $3.40 per share for the prior year. The company is yet to report any revenues.

Notably, 2021 was a milestone year for the company as it achieved positive data from three clinical programs, including giant axonal neuropathy (GAN), GM2 gangliosidosis, and CLN7 disease.

Strategic Update

Concurrent with the earnings release, the company provided an optimistic update on its pipeline prioritization initiatives.

The company stated that it remains focused on key value-driving registration-directed programs, GAN and Rett syndrome.

GAN has an estimated addressable patient population of 5,000 globally. The company awaits feedback on the registration pathway and regulatory update that is expected by mid-2022.

Meanwhile, for Rett syndrome, which affects over 350,000 patients worldwide, the company expects preliminary clinical data by the end of 2022 under the recently approved Clinical Trial Application (CTA).

Likewise, to increase operational focus and efficiency on GAN and Rett syndrome, the company intends to pause all additional research and development activities for other ongoing clinical programs.

Notably, the company expects to achieve several milestones in 2022 with respect to the initiation and continuation of clinical development of the above-mentioned programs.

Management Weighs In

Taysha CEO, RA Session II, stated “To increase operational efficiency, activities for other ongoing clinical programs will be minimized and all additional research and development will be paused.”

He highlighted, “As a result, we have reduced our workforce by approximately 35 percent. Our strategic pipeline prioritization, along with existing cash and financing under our current debt facility is expected to extend cash runway into the fourth quarter of 2023.”

Wall Street’s Take

Following Q4 earnings miss, Wedbush analyst Laura Chico decreased the price target on Taysha Gene Therapies to $22 (237.4% upside potential) from $33 and reiterated a Buy rating.

Turning to Wall Street, the analyst consensus is also optimistic about Taysha Gene Therapies, with a Strong Buy rating based on nine unanimous Buys. The average Taysha Gene Therapies price target of $40.50 indicates an upside potential of a whopping 521.17%.

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