According to the Cleveland Clinic, more than 60% of infant blindness cases are caused by inherited eye diseases such as congenital cataracts and glaucoma, retinal degeneration, optic atrophy and eye malformations., and up to 40% of patients with certain types of strabismus (ocular misalignment) have a family history of the disease. In adults, glaucoma and age-related macular degeneration are two of the leading causes of blindness, and both appear to be inherited in a large portion of cases.
Applied Genetic Technologies (Nasdaq: AGTC) is developing treatments for severe opthalmological diseases using gene therapy to replace abnormal or broken genes with normal functional genes, enabling the body to produce proteins to treat its own illness.
Pipeline
AGTC has a broad pipeline of severe opthalmological diseases and corresponding gene targets that it’s pursuing in the clinic, including two programs under collaboration with Biogen (Nasdaq: BIIB).
Source: Applied Genetic Technologies Corporation website
X-Linked Retinoschisis (XLRS)
An inherited form of retinal degeneration affecting young males, presenting with poor visual acuity by school age that usually worsens during the teenage years. Severe complications such as retinal hemorrhage or retinal detachment occur in up to 40% of patients, especially in older individuals. There are currently no approved treatments for XLRS.
Achromatopsia (ACHM)
An inherited condition that is associated with visual acuity loss, extreme light sensitivity resulting in daytime blindness and total loss of color discrimination. There is no specific treatment, although deep red tinted spectacles or contact lenses can reduce symptoms of light sensitivity. AGTC is working on two programs based on the gene mutations known as CNGB3 and CNGA3, which account for 75% of affected patients.
X-Linked Retinitis Pigmentosa (XLRP)
An inherited condition that causes boys to develop night blindness by the time they are 10 years old, followed by progressive constriction of the field of vision. Affected men become legally blind at an average of about 45 years of age.
Age-Related Macular Degeneration (AMD)
The leading cause of blindness in the US, with more than 1.6 million people affected. Wet AMD is a more severe progression of AMD. Although it affects only 10-15 percent of those who have the condition, it accounts for 90 percent of the severe vision loss caused by macular degeneration according to the Macular Degeneration Partnership. One of the treatments for wet AMD is ranibizumab, a blood vessel growth inhibitor marketed as Lucentis by Roche (OTCQB: RHHBY) and Novartis (NYSE: NVS), which requires frequent injections into the affected eye. AGTC believes that gene therapy offers a potential long-term solution to treat wet AMD with just one injection, and that there is a strong rationale for combination therapy to become the standard of care.
Management
CEO Sue Washer has led the company since 2002. She has a decade of pharmaceutical management and research experience with Abbott Labs (NYSE: ABT) and Eli Lilly (NYSE: LLY) and more than 16 years of senior management experience with entrepreneurial firms in Florida including three start-ups. Ms. Washer is the chair of Southeast BIO and a member of the Executive Committee of BioFlorida and the board of the Florida High Tech Corridor Council.
William Sullivan was announced yesterday as the new CFO succeeding the retiring Larry Bullock. Mr. Sullivan has 20 years of experience in corporate finance, leading strategic transactions, fundraising, and accounting. Most recently, he held a variety of leadership positions at Merrimack Pharmaceuticals (Nasdaq: MACK), including CFO, Principal Accounting Officer and Treasurer.
Michael Goldstein, MD has been Chief Medical Officer since November 2016. Previously, Dr. Goldstein was the Chief Medical Officer and VP of Clinical Research at Eleven Biotherapeutics (Nasdaq: EBIO). He is the Co-Director of Cornea and External Disease Service and Assistant Professor of Ophthalmology at the New England Eye Center.
AGTC Stock
AGTC went public in 2014, raising $57.5 million in gross proceeds at a post-IPO valuation of $168 million. The stock peaked at above $400 million in market value in early 2015 but is now trading at an all-time low of just $82 million. The company has a good cash position – $149 million as of the end of March and an anticipated $130-$140 million at the end of the fiscal year, June 30th. We like where AGTC sits on the risk-reward spectrum, as we await the company’s fiscal year-end update sometime this month.
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