FDA Expedites Review of Gene Therapy Co.'s Drug

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Clinical stage genetic medicines company MeiraGTx Holdings Plc (MGTX:NASDAQ) announced that the U.S. Food and Drug Administration has granted regenerative medicine advance therapy (RMAT) designation to its treatment for the grade 2/3 radiation-induced xerostomia (RIX).

The designation was established under the 21st Century Cures Act to expedite the development and review of promising regenerative medicine therapeutic candidates, such as human gene therapies, that treat, modify, reverse, or cure serious or life-threatening diseases, the company said.

"This RMAT designation underscores the strength of our data indicating the potential of our AAV2-hAQP1 therapy to significantly improve the lives of patients who suffer from xerostomia following radiation treatment," said President and Chief Executive Officer Alexandria Forbes.

According to MeiraGTx, the requirements for receiving an RMAT designation include that the drug candidate is an advanced regenerative medicine (in this case, a gene therapy), that the therapy is targeting a serious condition (in this case, Grade 2 and Grade 3 late xerostomia caused by radiotherapy for cancers of the upper aerodigestive tract), and that the applicant has presented preliminary clinical evidence demonstrating that the drug candidate has the potential to address an unmet need in the serious condition.

"The RMAT requirement for clinical data supporting a benefit in an unmet need is a high hurdle, with less than half of all RMAT designation applications granted," Forbes said. "We are therefore very excited to have been awarded this designation for our AAV-hAQP1 program, and we look forward to working closely with the FDA to bring this potential life-changing therapy to these patients with no alternative treatments as quickly as possible."

AAV2-hAQP1 was previously granted Orphan Drug Designation by the FDA, MeiraGTx said.

Condition Affects 30-40% of Head, Neck Cancer Patients

Xerostomia is also called dry mouth. The National Institute of Dental and Craniofacial Research said that when it persists, "It can make chewing, swallowing, and even talking difficult. Dry mouth also increases the risk for tooth decay or fungal infections in the mouth because saliva helps keep harmful germs in check."

Analysts Luca Issi and Lisa Walter of RBC Capital Markets wrote that they believed the stock, which they rated Outperform Speculative Risk, was oversold and increased their price target from US$9 to US$11.

Grade 2/3 radiation-induced xerostomia (RIX) is a severely debilitating consequence of radiation treatment for head and neck cancer that affects approximately 30-40% of all patients treated.

"This is a completely unmet need with no treatment options, and a large addressable market with over 170,000 patients currently in the U.S., and an additional 15,000 new patients in the U.S. each year," the company said in a release.

Treatment with AAV2-hAQP1 "involves a small dose locally delivered to the salivary gland via a non-invasive procedure that can be delivered in a dental office or oncology center where these patients are seen at least annually following radiation treatment."

MeiraGTx has developed the technology to apply genetic medicine to more common diseases, increasing efficacy, addressing novel targets, and expanding access in some of the largest disease areas where the unmet need remains high.

Other diseases targeted by the company include Parkinson's disease and X-linked retinitis pigmentosa (XLRP), which is a genetic disease that causes blindness in men.

'Impressive Benefits in Patient-Reported Outcomes'

Analysts Luca Issi and Lisa Walter of RBC Capital Markets wrote in a November 13 updated research note that they believed the stock, which they rated Outperform Speculative Risk, was oversold and increased their price target from US$9 to US$11.

Phase II for AAV2-hAQP1 was continuing to enroll patients at multiple sites in the U.S., Canada, and the United Kingdom, the analysts wrote.

Analyst Daniil Gataulin of Chardan Research gave the stock a Buy rating and a price target of US$36 per share.

Issi and Walter noted that they so far liked the study's "impressive benefits in patient-reported outcomes," its clinically meaningful improvement in whole saliva flow, and the first anecdotal evidence of transgene expression.

"Overall, we continue to like a solid clinical signal for a large indication (170k patients in U.S.) with limited therapeutic options," the analysts wrote. "We think randomized Phase II is likely to replicate the signal, and we like that hitting primary endpoint (PROs), and robust benefit on whole saliva flow may be sufficient for approval. BLA (biologics license application) filing in 2026 is possible."

Analyst Daniil Gataulin of Chardan Research gave the stock a Buy rating and a price target of US$36 per share in an October 20 updated research note.

"Relatively few gene therapy products have ever been approved for human use globally," Gataulin wrote. "If the regulatory pathway proves more complex and/or time-consuming than we anticipate, there could be a materially negative impact to our projections and our target price."

The Catalyst: Gene Therapy Market Growing

According to Coherent Market Insights, the global cell and gene therapy market size was estimated at US$22.7 billion in 2023 and is expected to surpass US$132.6 billion by 2030, growing at a CAGR of 28.7% from 2023 to 2030.

The market is witnessing significant growth due to the rising prevalence of chronic diseases such as cancer, cardiovascular diseases, and genetic disorders, the firm reported. According to WHO, cancer is the second leading cause of death globally and was responsible for nearly 10 million deaths in 2020.

Coherent said the FDA has approved drugs like Lantidra, the first donor pancreatic islet cellular therapy made from deceased donor pancreatic cells to treat type 1 diabetes, and ZYNTEGLO, a one-time gene therapy for transfusion-dependent Beta-thalassemia.

"The key market players are focused on making collaborations with other companies to develop new gene therapies and commercialize those in the cell and gene therapy market," its researchers said.

Ownership and Share Structure

According to Reuters, about 4% of the company is held by insiders and management and 59% by institutions.

Top shareholders include Perceptive Advisors LLC with 16.1%, Sanofi SA with 14.71%, Johnson & Johnson Innovation with 8.5%, Adage Capital Management with 6.69%, and Prosight Capital with 6.27%.

It has about 78 million shares outstanding with a market cap of US$456.42 million and trades in a 52-week range of US$3.85 and US$7.60.