Audentes Therapeutics, Inc., a biotechnology company, focuses on developing and commercializing gene therapy products for patients suffering from diseases caused by single gene defects in the United States. The company is developing four products, including AT132 for the treatment of X-linked myotubular myopathy; AT342 for the treatment of crigler-najjar syndrome type 1; AT307 for the treatment of the CASQ2 subtype of catecholaminergic polymorphic ventricular tachycardia; and AT982 for the treatment of pompe disease. Audentes Therapeutics, Inc. has a collaboration with the University of Pennsylvania to develop AT342, an AAV gene therapy for Crigler-Najjar Syndrome, an inherited, metabolic liver disease. The company was founded in 2012 and is based in San Francisco, California.
(Summary (Company) (Chart)
15 April 2018
1yr Target $41.60
Payout Ratio 0.00%
1yr Cap Gain 9.82%
1yr Tot Return 9,82%
EPS (ttm) $-2.75
EPS next yr $-3.46
Forward P/E ---
EPS next 5yr 4.40%
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Market Cap $1.38 Bil
Earnings $-70.70 Mil
Profit Margin ---
Quick Ratio 7.70
Current Ratio 7.70
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Audentes Therapeutics is a clinical stage biotechnology company focused on developing and commercializing gene therapy products for patients living with serious, life-threatening rare diseases caused by single gene defects. The Company believes that gene therapy has powerful potential to treat these diseases through the delivery of a functional copy of the gene to those affected cells, resulting in the production of the normal protein.
They have a compelling portfolio of product candidates, including AT132 for the treatment of X-Linked Myotubular Myopathy, or XLMTM, AT342 for the treatment of Crigler-Najjar Syndrome, or Crigler-Najjar, AT982 for the treatment of Pompe disease and AT307 for the treatment of the CASQ2 subtype of Catecholaminergic Polymorphic Ventricular Tachycardia, or CASQ2-CPVT. They have initiated Phase 1/2 clinical studies in their AT132 and AT342 programs, and plan to provide interim data from these studies in the second quarter of 2018. They also plan to file an IND for AT307 to treat CASQ2-CPVT in the first quarter of 2018, and are conducting IND-enabling preclinical studies of AT982 for the treatment of Pompe disease, for which they intend to file an IND in mid-2018. The Company maintains full global rights to all their product candidates.
Audiences has developed a proprietary in-house cGMP manufacturing capability that provides them with a core strategic advantage, enabling superior control over development timelines, costs and intellectual property. Their manufacturing facility, located in South San Francisco, will support the Company's research, process development and manufacturing capabilities in accordance with current Good Manufacturing Practices, or cGMP, requirements.
The Company has established a comprehensive platform for the production of their adeno-associated virus vector, or AAV, product candidates and plan continued investment to further optimize their manufacturing capabilities to cost-effectively produce high-quality AAV vectors at both clinical and commercial scale.
The Company's vision is to be the global leader in AAV-based genetic medicine for rare diseases. In pursuit of that goal, the Company is executing on their core strategic initiatives, which include the advancement of current product candidates, the continued development of proprietary in-house manufacturing capabilities, and the expansion of the pipeline.
The Company's mission is to bring innovative gene therapy products to patients living with serious, life-threatening rare diseases. They believe their product candidates have the potential to provide long-lasting benefits from a single administration. Given the available clinical and regulatory pathways, the Company believes the rarity and severity of the diseases targeted will provide advantages for drug development, including the potential for expedited development and regulatory review, and market exclusivity.
Audiences focuses on the treatment of rare diseases caused by single gene, or monogenic, defects in DNA that can be effectively addressed using gene therapy. Conventional approaches such as protein therapeutics attempt to replace the deficient protein, but they do not correct the underlying genetic defect causing the disease. In addition, protein therapeutics often require frequent administration by injection or infusion and often result in sub-optimal safety and efficacy. Gene therapy is the ideal treatment for diseases caused by monogenic defects.
The Company's portfolio of product candidates employs the use of AAV, a small, non-pathogenic virus that is genetically engineered to function as a delivery vehicle, or vector, and is administered to a patient to introduce a healthy copy of a mutated gene to the body. AAV gene therapy vectors are modified such that they will not cause an infection like a normal virus, but are capable of delivering therapeutic genes into patients’ cells. Vectors derived from AAV have a well-established safety profile in humans and have been shown to effectively deliver genes to the liver, eye, muscle and brain.
Preclinical and clinical data demonstrate that AAV vectors are capable of providing durable efficacy with a favorable adverse event profile due at least in part to AAV’s low immunogenic potential. AAV vectors can be described by the serotype, or strain, of the original virus isolate that was used to form the outer shell, or capsid, of the vector.
The Company's business model is to develop and commercialize a broad portfolio of gene therapy product candidates to treat rare diseases. They use a focused set of criteria to select product candidates that we believe have the best chance of success. These criteria include:
- serious, life-threatening rare diseases;
- monogenic diseases with well-understood biology;
- disease characteristics well-suited for treatment with AAV gene therapy technology;
- high potential for meaningful clinical benefit;
- compelling preclinical data;
- clear measures for evaluation in clinical trials; and
- opportunities for expedited development through established regulatory pathways.
Audiences has built a portfolio of gene therapy product candidates and they intend to further expand that portfolio over time. Set forth below is a table summarizing their current development programs.
AT132. XLMTM is characterized by extreme muscle weakness, respiratory failure and early death, with an estimated 50% mortality rate in the first 18 months of life. The disease is the result of mutations in the MTM1 gene that affect the production of myotubularin, an enzyme required for normal development and function of skeletal muscle. The incidence of XLMTM is estimated to be one in 50,000 male births. Currently, only supportive treatment options, such as ventilator use or a feeding tube, are available. Audiences is developing AT132, an AAV8 vector containing a functional copy of the MTM1 gene, for the treatment of XLMTM. AT132 may provide patients with significantly improved outcomes based on the ability of AAV8 to treat skeletal muscle. Preclinical study results in both canine and murine models of the disease demonstrated dramatic improvements in all outcomes, including histology, muscle strength, respiratory function and survival. The Company's goal is to achieve these same benefits in XLMTM patients following a single intravenous administration of AT132.
AT342. Crigler-Najjar is a rare, congenital autosomal recessive monogenic disease characterized by severely high levels of bilirubin in the blood, which presents a significant risk of irreversible neurological damage and death. The average life expectancy is reported as being 30 years of age with phototherapy. Crigler- Najjar is estimated to affect approximately one in 1,000,000 newborns. Infants with Crigler-Najjar develop severe jaundice shortly after birth resulting in rapid presentation and diagnosis. Crigler-Najjar is caused by mutations in the gene encoding the UGT1A1 (uridine-diphosphate (UDP)-glucuronosyltransferase (UGT) 1A1) enzyme resulting in an inability to convert unconjugated bilirubin to a water-soluble form that can be excreted from the body. Clinical diagnosis is confirmed via genetic testing of the UGT1A1 gene. The current standard of care for Crigler-Najjar is aggressive management of high bilirubin levels with persistent, daily phototherapy, usually for longer than 10 to 12 hours per day using intense fluorescent light focused on the bare skin, while the eyes are shielded. Phototherapy speeds bilirubin decomposition and excretion and lowers serum bilirubin, but wanes in effectiveness as children age due to thickening of the skin and reduction in surface area to body mass ratio. Data from our prospective natural history study LUSTRO demonstrate that persistent phototherapy only reduces bilirubin to levels just below those that are considered to be neurotoxic. In some cases, a liver transplant may be required for survival.
AT982. Pompe disease is a serious, progressive genetic disease characterized by severe muscle weakness, respiratory failure leading to ventilator dependence and, in infants, increased cardiac mass and heart failure. The incidence of Pompe disease is reported to be approximately one in 40,000 births. The infantile onset form of Pompe disease is often fatal due to cardio-respiratory failure within the first year of life. In the late onset form of Pompe, which typically manifests in the third or fourth decades of life, the disease is progressive and life-limiting with significant ventilator and wheelchair use. Both forms of Pompe disease are caused by mutations in the gene encoding the enzyme alpha-glucosidase, or GAA, which results in a deficiency of GAA protein and leads to the accumulation of glycogen in an intracellular organelle known as the lysosome. The only approved treatment for Pompe disease is enzyme replacement therapy, or ERT, which is a chronic treatment delivered in bi-weekly intravenous infusions. Despite the availability of ERT, significant medical need persists, which is primarily due to the immunogenicity of ERT and its inability to penetrate all of the key tissues affected by Pompe disease. Gene therapy may effectively address these limitations.
AT307. CASQ2-CPVT is a rare monogenic disease that is characterized by life-threatening arrhythmias that may lead to sudden cardiac death. There are currently only limited treatment options with variable efficacy for patients suffering from CPVT, including beta-blockers and a sodium channel blocker, flecainide. The autosomal recessive form of the disease is caused by mutations in the calsequestrin 2 gene, or CASQ2 gene, and is characterized by stress- induced heartbeat rhythm changes in an otherwise structurally normal heart. Literature estimates suggest that CPVT occurs in one in 10,000 people, with approximately 2% to 5% due to mutations in the CASQ2 gene. This equates to an approximate prevalence of 6,000 affected people in North America, Europe and other addressable markets. To confirm these numbers, we have recently initiated activities to identify CASQ2-CPVT patients and further characterize the disease burden and unmet medical need for patients living with CPVT. Despite treatment with anti-arrhythmia therapies, sympathectomy and implantable cardiac defibrillators, a significant portion of the patients remain symptomatic. We are developing AT307, an AAV8 vector containing a functional version of the CASQ2 gene. Preclinical data in murine models of the disease demonstrated an ability to prevent ventricular tachycardia through restoration of CASQ2 protein expression. We are advancing AT307 with the goal of providing a single administration of AT307 that results in a significant reduction in life-threatening arrhythmic events and a major improvement in quality of life.
Investing in Audentes, like any other clinical stage biotechnology company, is an extremely risky idea. Most of these companies fail simply because of the difficulty of the science and the approval process. But this risk brings in a lot of investors willing to take a chance on the probability of a big payout if things work out. That's also reflected in the options market. My strategy has always been to pursue the big payoff but be aware of the risk, be nimble in my pursuits, and always have an exit strategy.
In this case, I will pursue the strategy of write-buy-write. I intend to accumulate these shares through the sale of cash secured puts. Once owned, I intend to write call options. The intent of these options is to get into the shares at a specified price that's less than the current price and then sell call options to reduce my costs. I think if done right this can be a lucrative transaction.
At the current price of $37.88, May 35 puts can be sold for around $5 allowing the seller to purchase these shares for a net price of $30 if exercised. The sale of May $40 calls is currently about $7. These are tremendous premiums and just demonstrate the risk involved in owning these shares.
This is a very risky trade and I don't suggest anyone should avail themselves of this opportunity, but for me there's potential over a very small timeframe to get a return on investment of around 15-20% and that's something I just can't pass up.