MGTX - MeiraGTx: A Very Attractive Longer-Term Play With Potential Near-Term Catalysts

2024-07-15 11:02:26 ET

Summary

• Bota-vec sale to JNJ/Janssen is complete – cash & future milestones from the deal should carry MeiraGTx through the next catalysts.
• The partnership with Sanofi strengthens the balance sheet and helps validate technology platforms.
• MGTX is no longer just an ocular GTx (gene therapy) company - its GTx for radiation-induced xerostomia has a high potential for success.
• Riboswitch gene regulation platform R&D Day in 2H'24 could provide significant upside through future lucrative collaborations.
• The price at $4.61/s or ~$296M valuation = Long-term Buy because I can see a path for a 3-5x pop over the next 12–18 months.

Introduction

I have been following MeiraGTx (MGTX) since the company was formed in 2015 with the acquisition of Athena Vision, Ltd. and assets from Kadmon, Inc. (formerly KDMN and once a top holding of mine until its acquisition by SNY). Only in the past year or so have I acquired a position in MGTX due to the potential of a couple of its lead assets and the company’s partnership with Johnson & Johnson (JNJ). Last summer I bought a 2% position at just over $4/s and then exited in December with a nice gain. I waited for the stock to drop below $5/s this spring and began acquiring shares once again. While I wasn’t able to bottom-tick my recent purchases, my current average price is in the mid-$4/s range and this position once again represents my typical 2% sizing in the portfolio for a pre-commercial company. Here is why:

MGTX has made a couple of shrewd moves over the past several months that have shifted the company fully from “just” an ocular gene therapy ('GTX') company, to encompass much more. In tandem, these moves have strengthened and clarified the future funding needed for the company to get its primary assets through proof-of-concept studies and to a possible commercialization or two. I will briefly review what has taken place below and then focus on MGTX’s AAV2-hAQP1 for RIX, currently in phase 2, followed by the additional assets I think have the most potential at this point in time....

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