Thursday was certainly not a good day to be a shareholder Intellia Therapeutica (NASDAQ: NTLA). After the biotech sector delivered some news from the lab and witnessed an analyst’s negative reaction, the company’s share price closed more than 20% lower.
Intellia, a clinical-stage biotechnology company developing drugs using cutting-edge genome editing technology, delivered the latest news that morning.
The company unveiled the results of a Phase 2 trial of its NTLA-2002, which targets hereditary angioedema (HAE), a swelling disorder. The 27-patient study found that the treatment reduced the number of monthly attacks of angioedema by 86% to 81%. In a group of eleven patients taking a higher dose of the drug, eight responded completely to treatment, that is, they experienced no attacks for up to eight months after dosing.
Intellia said NTLA-2002 was generally well tolerated and showed no serious side effects.
The company spoke about the study’s findings and quoted CEO John Leonard as saying, “We are very encouraged by these results, which we believe distinguish NTLA-2002 from other prophylaxis treatments.”
He added, “What was previously an unimaginable potential for freedom from chronic therapy is one step closer to becoming a reality for the HAE community.”
There are doubts as to whether these results will be enough to propel NTLA-2002 and Intellia to prominence and success. After digesting them, Baird analyst Jack Allen assertively lowered his price target for the stock to $18 per share, from his previous $24, and maintained his neutral rating.
According to reports, Allen acknowledged the drug’s efficacy but warned that its performance was not sufficient to reduce the risks of in vivo gene editing.
If I were an investor, I wouldn’t abandon Intellia just yet. The Baird forecaster certainly has a point, but this type of drug development is still in its early stages and the company is clearly taking advantage of it in a smart way. It could be a good discount play for investors who are not risk averse.
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