September 30, 2019 BARRON’S 23
million and that’s roughly where Regenxbio’s mar-
ket cap has been lately. The opportunity derives
from investors not yet modeling the majority of
the 30 or so products in the company’s pipeline.
The consensus has modeled only five to seven.
Ten to 15 are in the clinic and could soon generate
data. Thus, many Regenxbio products should soon
be modeled by analysts, which tends to lead to
better stock performance from earnings estimate
upgrades. Think of the company as having up to
30 shots on goal. My price target is $150.
UniQure, another of my top picks entering
2019, is up about 50% this year, resulting in about
a $1.6 billion cap. I expect it to get acquired,
perhaps by BioMarin, and perhaps after uniQure
releases in 2020 its pivotal Phase 3 data for its
hemophilia B gene therapy. BioMarin has a hemo-
philia A gene therapy in late-stage development
and would see synergy in having a hemophilia B
asset, and uniQure also has rights to National
Institutes of Health patents and hemophilia B
Padua transgene patents that could be useful for
BioMarin. Furthermore, BioMarin, as I under-
stand it, is using a manufacturing process similar
to uniQure’s, which is patent-protected. Finally,
uniQure could produce proof-of-concept data in
Huntington’s disease in 2020. UniQure’s one-time
gene therapy, if successful, would be addressing a
large gene-therapy market. Clinical success in
Huntington’s disease in 2020 could lead to uniQure
shares doubling or tripling. The stock is around
$47. My price target is $125.
What else do you like?
Amusa:MeiraGTx Holdings [MGTX], despite
roughly doubling this year, continues to be a top
pick. It is levered to synthetic biology, or gene
regulation. For gene therapy to work in mass-
market conditions, clinicians will need to be able
to turn it on and/or off as needed. Johnson &
Johnson [JNJ] partnered with Meira on Meira’s
gene-regulation technology before it took an
equity stake in Meira, and before J&J effec-
tively derisked the inherited retinal disease, or
IRD, platform by partnering to pay most of the
costs of these programs. Meira potentially could
double in the next year if the company produces
positive data on large-market indications not
partnered with J&J. Success there could in-
crease the long-term potential for J&J to ac-
quire Meira. My MeiraGTx price target is $45.
The Medicines Co. [MDCO] was another of
my top picks entering 2019. The stock has more
than doubled this year, and the market cap is
now over $4 billion. The company is reporting
positive test results for inclisiran, an anti-
PCSK9 genetic medicine to lower cholesterol. in
pivotal Phase 3 studies. The market is skeptical
on inclisiran, due to the lackluster performance
of anti-PCSK9 monoclonal antibodies Praluent
and Repatha. Unlike these competitors, which
require storage and administration every two
week, inclisiran can be stored at room tempera-
ture and administered only twice a year. To me,
companies like Pfizer, Eli Lilly [LLY], and
Roche Holding [RHHBY] don’t have heir-
apparent cholesterol products. That makes
Medicines another potential acquisition target.
My Medicines target price is $100.
I have two more stocks to discuss.
Let’s hear them.
Amusa:Krystal Biotech [KRYS], another of my
top picks, is up more than 50% in 2019. Krystal
is unique in doing gene therapy for the skin and
showing enough success to achieve important
regulatory designations in the U.S. and Europe.
Under success scenarios, the company could
have the opportunity to address everything
from rare skin diseases to mass-market skin
diseases like diabetic ulcers or even aesthetic
conditions. Krystal has invested meaningfully in
manufacturing—a credible signal that manage-
ment believes in its own products, which isn’t a
given in biotech. My price target is $75.
Finally, Kodiak Sciences [KOD], despite
more than doubling in 2019, still has only a $535
million market cap. It focuses on retinal diseases,
such as wet AMD, diabetic retinopathy, and reti-
nal vein occlusion. The standard of care in these
markets generated more than $10 billion of sales
in 2018, which makes Kodiak’s market cap cheap.
Kodiak’s lead product is engineered to maintain
Picks
Verve Therapeutics
Private
Beam Therapeutics
Private
Verana Health
Private
David Schenkein
General Partner;
Co-HeadofLifeScience
Investment Team
GV
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