Biopharma Korro Bio (KRRO) has been making significant strides in genetic medicine, including developing RNA editing to address rare and widespread diseases. The company recently reported some big moves – a regulatory filing for a clinical study of KRRO-110, a partnership with Novo Nordisk (NVO), and the formation of a Clinical Advisory Board. Korro is set to start a Phase 1/2a clinical study of KRRO-110 for Alpha-1 Antitrypsin Deficiency (AATD) in 2025. It’s early days, and there are numerous hurdles to overcome, but investors looking for a potential up-and-coming biotech may want to put this one on their radar.
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Korro Receives Study Approval
Korro Bio is a biopharmaceutical firm that aims to create a new variety of genetic medicines through RNA editing to treat uncommon and widespread diseases. The company’s research aims to utilize the body’s natural RNA editing process to bring about a brief, precise single-base edit, potentially delivering more precision and adjustability and ultimately improving long-term tolerability.
The company recently announced it has received approval to initiate a Phase 1/2a clinical study of KRRO-110 for Alpha-1 Antitrypsin Deficiency (AATD) in Australia. The study will evaluate the safety of KRRO-110 in up to 64 participants from the first quarter of 2025 and is expected to be completed in 2026.
Korro Bio Finds a Partner in Novo Nordisk
Korro has also announced a collaboration with Novo Nordisk to advance the discovery and development of genetic medicines to treat cardiometabolic diseases. The collaboration combines Novo Nordisk’s cardiometabolic disease understanding and drug development experience with Korro’s proprietary platform, the Oligonucleotide Promoted Editing of RNA (OPERA), designed to make changes in mRNA encoding the protein while leaving the DNA genome unaltered.
The partnership allows Korro to receive up to $530 million in upfront, development, and commercial milestone payments, along with tiered royalties and R&D funding. Korro will advance up to two programs through preclinical development, after which Novo Nordisk may further progress the programs through clinical studies.
Korro’s Rise in Costs
During the third quarter of 2024, Korro saw an increase in its Research and Development (R&D) expenses from $14.0 million to $16.0 million. This escalation was primarily due to increases in discovery, preclinical, and contract manufacturing costs.
General and Administrative (G&A) expenses also rose from $5.1 million to $7.3 million. The rise was mainly due to increased personnel costs, professional services, information technology, insurance, and other expenses linked to the build-out of the G&A function and the compliance costs as a public company.
Finally, there was a rise in the net loss for Korro, from $18.5 million to $21.0 million, which translated to earnings per share (EPS) of -$2.26.
As of the quarter’s end, the cash position was $169.1 million, which is projected to cover operational expenses and capital requirements until the latter half of 2026.
Is KRRO a Buy?
The stock has been highly volatile (beta of 3.58), lurching around and ultimately shedding roughly 15% over the past year. It trades near the lower end of its 52-week price range of $30.01 – $98.00 and shows ongoing negative price momentum as it trades below all major moving averages.
Analysts following the company have been bullish on KRRO stock. For instance, Jones Research analyst Catherine Novack recently initiated coverage of the stock with a Buy rating and $130 price target. She noted Korro is one of a growing number of biotech companies focused on RNA editing and believes the company’s proof-of-concept data in alpha-1 antitrypsin deficiency will unlock other opportunities, such as pain, liver disease, and cardiovascular disease.
Korro Bio is rated a Strong Buy overall, based on the recent recommendations from six analysts. The average price target for KRRO stock is $133.83, representing a potential 181.81% upside from current levels.
Bottom Line on Korro Bio
Korro Bio has made significant strides in medical research, business collaborations, and regulatory advancements. The recently initiated clinical study and a promising partnership with Novo Nordisk bode well for potential upside growth. Although the company’s stock has seen volatility and price decline, analysts remain optimistic about Korro’s future, citing potential in RNA editing and prospective treatment avenues for a myriad of diseases. It is a lotto ticket stock that represents high risk and potentially high reward for the most intrepid of investors.
