MeiraGTx: Novel Riboswitch Technology Could Add Value

Nov. 01, 2021 3:44 PM ETMeiraGTx Holdings plc (MGTX)2 Likes

Summary

  • I covered MGTX in January, but didn't buy the stock.
  • The stock has appreciated considerably since, but mainly due to a Barron's mention.
  • The company has attractive technology.
  • Looking for more investing ideas like this one? Get them exclusively at The Total Pharma Tracker. Learn More »

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I covered MeiraGTx (NASDAQ:MGTX) in January and nothing much has happened to the company except that Barron’s mentioned it on October 18 and the stock shot up to its 52-week high on a 7 million volume against the previous day’s 24,000. The author highlighted MeiraGTx's industry-leading manufacturing facilities, their pioneering riboswitch technology, and their Janssen collaboration.

To quickly recap, MGTX develops gene therapies for ophthalmic, neurologic and other diseases. MGTX has two platforms - a viral vector platform and a gene therapy platform that can be switched on and off by a small molecule riboswitch. They also have a major development deal with Janssen.

Of late, the viral vector technology has been called into question mainly through the troubles at bluebird bio and other companies using lentiviral vectors. MGTX does not use lentiviral vectors. It uses AAV5 capsid vectors, which are known to be less immunogenic than older generation viral vectors; however, it has still endeavored to protect its technology by introducing a photoreceptor-specific promoter called human rhodopsin kinase promoter (hRKp). This limits transgene expression to photoreceptor cells alone. This way, the chance of off-target expression is limited at least in their ophthalmic space. For a discussion of viral vector technology, read here.

One interesting aspect of MGTX's treatment is that it is aiming to deliver therapy only once in a patient’s lifetime. While this substantially limits the market, it can also be priced lucratively. One-time therapy is enabled by the AAV5 vector’s ability to transduce into non-dividing cells. As the company says:

Importantly, AAV vectors enable targeting of therapeutic genes to non-dividing cells, in which they are thought to remain for the rest of the cell’s life. This means that a single treatment may offer patients a durable effect and long-term benefit. The specific cells of the eye, salivary gland and the neurons that we target in our current gene therapy programs are largely non-dividing cells and preclinical evidence has shown that they can be effectively targeted by the specific AAV capsids that we use, enabling us to potentially achieve a durable impact on each of the diseases that we treat.

As to the riboswitch, this is an oral, small molecule inducer. When it is absent, the therapy does not produce the specific protein expression it is intended to do. When protein expression is required, the small molecule is introduced and binds to an aptamer, a single stranded oligonucleotide which, unlike its normal inhibitory function, here in this case, splices out the regulatory material and enables protein expression. This regulatory material is designed as a premature stop codon which degrades the message and disables protein expression.

MeiraGTx calls this a “potentially transformative gene regulation technology.” According to the company:

Our proprietary splicing-based riboswitch platform is superior to other inducible gene expression systems with unprecedented dynamic range, demonstrated ability to regulate any transgene, and allows for the incorporation of any bespoke promoter to achieve desired tissue specificity and expression levels.

The company also says that the range of regulation of their mammalian riboswitch is over 5000x greater in the presence of the small molecule than in its absence. The company claims that this is the first proprietary mammalian riboswitch and “also the first instance of a proprietary system for screening randomized aptamers and small molecules within mammalian cells for functional interactions.”

The company has two cGMP manufacturing facilities, one in London and the other in Ireland, which they just recently acquired. The London facility is a 29,000 square foot facility which has two cell production suites, three independent viral vector production suites providing multi-product and multi-viral vector manufacturing capabilities and an integrated, flexible fill-and-finish suite. The Ireland campus has 150,000 square feet and “will include a high capacity cGMP manufacturing hub, clinical supply storage, quality control laboratories for global release, up to ten viral vector production suites, fully scalable automated fill and finish facilities, an extensive warehouse and a separate cGMP plasmid and DNA manufacturing facility.”

For a discussion of the MGTX pipeline, you should read my previous article from January. Since then, a few developments occurred. The FDA granted a fast track designation to AAV-CNGA3 gene therapy for the treatment of achromatopsia (ACHM) caused by mutations in the CNGA3 gene, an inherited retinal disease or IRD.

In September, the company made a presentation of early data from their XLRP program at the EURETINA 2021 Virtual Meeting. Key highlights:

  • For the intermediate dose escalation cohort (N=4), intervention with AAV5-RPGR therapy in the poorer-seeing eye altered the course of natural disease progression

  • At 12 months post-intervention, MS and V30 in the treated eye were similar to levels observed 24 months pre-intervention, while the untreated eye showed a continued downward trajectory

The company is planning a phase 3 pivotal trial in this program. Dates have not been announced.

Financials

MGTX has a market cap of $952mn and a cash reserve of $172mn. They have good interest from smart money; key holders are Perceptive, Orbimed and Adage. JNJ holds a 6% stake. Insiders have almost never bought stock; they have, however, heavily sold stock.

Research and development expenses were $15.2 million for the quarter ended June 30, 2021, while SG&E was $10.4mn. The company expects the cash to last to 2023. They do have $18mn due from JNJ, and more on the way as part of the deal.

The company owns six patent families, with the first patent family consisting of one issued and 23 pending applications, and the other 5 having 22 pending applications each. The company states:

As of December 31, 2020, we own, co-own, have an exclusive license, or an exclusive option to license 200 United States and foreign issued or allowed patents and 321 patent applications, pending in the United States and internationally.

Bottomline

I covered this one in January but did not buy the stock. The stock went up quite a bit since then, but I don’t regret my decision because if not for the Barron’s mention, the stock would have been trading sideways. I do like the company, and I think MGTX should be carefully watched for a derisked entry point, sometime before they start their phase 3.

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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