PRME - Prime Medicine: Gene Editing Tech With Unique Approach

2023-04-23 09:10:30 ET

Summary

• Proof of concept in vivo data from rodent studies and large animal studies for its technology is expected in the 2nd half of 2023.
• First IND application of PM359 treating patients with chronic granulomatous disease is expected in 2024.
• Additional IND filings for other indications in the pipeline are expected to be filed in 2025.
• Prime Medicine had $293.9 million in cash as of December 31, 2022. Enough to fund its operations into 2025.

Prime Medicine, Inc. ( PRME ) is a great speculative biotech play to look into. That's because I believe it can offer future gains for traders/investors. It expects to file its first Investigational New Drug ((IND)) Application in 2024. This will likely be with respect to the clinical candidate of PM359, which is being developed to treat patients with Chronic Granulomatous Disease ((CGD)). From there, other IND filings for other clinical candidates in the pipeline won't be filed until 2025. This means that a phase 1 study using PM359 for the treatment of patients with CGD won't start until 2024. That doesn't mean investors can't take advantage of this gap period before IND filings. That's because Prime Medicine will release proof-of-concept in vivo data from rodent studies and large animal studies in the 2nd half of 2023. This could be a catalyst for traders/investors to look forward to. In addition, it also intends to release preclinical data from other indications like liver, eye and neuromuscular disease programs during the same time period as well. Its gene editing technology approach is different in that it can search and replace genomic DNA sequences without the need to make double-stranded breaks. That is, cuts are made at the precise locations without unwanted toxicity or safety issues. If proof of concept is established using its Prime Editing Technology, then it could develop strategic partnerships to go after other indications it has not yet started to explore.

PM359 For The Treatment Of Patients With Chronic Granulomatous Disease

The main clinical program to go over in the pipeline would be the use of PM359, which is being developed for the treatment of patients with Chronic Granulomatous Disease. Chronic Granulomatous Disease ((CGD)) is a genetic disorder whereby white blood cells (phagocytes) are not able to kill certain types of bacteria and fungi. The problem with this disease is that some of these bacterial or fungal infections are life-threatening. The situation here is that CGD is caused by defects in an enzyme known as NADPH oxidase, in which phagocytes need to kill specific bacteria and fungi. A mutation in one of five of these different genes can cause such defects. How can a defect in one of these genes cause a problem for these patients? Well, it highly depends upon where the bacteria strike. If it strikes on the heart or kidney, then that is a major problem for the person in question. If on the other hand it strikes on another organ then issues can still arise, but they might cause minor inflammatory problems only. An inflammatory disorder that can be caused by CGD might be Crohn's Disease for example.

The thing is that these patients must take lifelong treatment options such as antibiotics or antifungals to prevent infections. Even then, there is another option which is an injection with interferon gamma, which is a protein that improves the function of phagocytes. Thus, this is another option that these patients with CGD can use. These are okay treatment options, but they are only good for continuous use. In other words, these patients have to take these treatments for the rest of their lives. This is where gene therapy can come in, whereby the goal is to produce effective phagocytes that could keep bacterial and fungal infections in check. If Prime Medicine can effectively use PM359 to treat these patients with CGD, then it will be one step closer to bringing a new type of treatment option for these patients. Again, as I stated above, an IND filing of PM359 for the treatment of this genetic disorder is expected in 2024. Thus, a phase 1 study using this gene therapy for the treatment of patients with CGD is not expected to begin until then.

Financials

According to the 10-K SEC Filing , Prime Medicine, Inc. had cash, short-term investments and related party short term investments of $293.9 million as of December 31, 2022. A big reason for the huge amount of cash on hand was because of an initial public offering ((IPO)) it had done back in October of 2022. That is when it sold a total of 10,294,118 shares of its common stock at a price of $17 per share. It raised a total of about $175 million. It also granted the underwriters a 30-day option to purchase up to an additional 1,544,117 shares of its common stock at the very same initial public offering price. Matter of fact, Prime Medicine Inc. started trading under the ticker symbol "PRME" on October 20, 2022. With this cash on hand, it believes it will be able to fund its operations into 2025. Thus, I wouldn't expect another cash raise to occur until at least mid-2024. However, should its stock price increase substantially before then, it might choose to raise cash earlier than expected.

Risks To Business

There are several risks that traders/investors should be aware of before investing in this biotech. The first risk to consider would be with respect to the catalyst that is approaching in the 2nd half of 2023. That is, Prime Medicine expects to release proof of concept in vivo rodent and large animal study data at that time. There is no guarantee that the data to be released then will be highly positive. In addition, there can be no assurance that such data will be viewed in a positive manner by the market. A second risk to consider would be relating to the IND of PM359 for the treatment of patients with Chronic Granulomatous Disease, which is expected to be filed in 2024. Even though the biotech expects that it will file an IND by then, there is no guarantee that the FDA will accept it. If the FDA doesn't accept it or feels that additional safety data might be required, then it may take a longer period of time for the company to be able to initiate a phase 1 study for this particular program. A final risk to consider would be with respect to the other IND filings which are expected in 2025. The hope is that if a phase 1 study for PM359 is initiated in 2024, that it will produce substantial proof of concept data in humans. If there are any safety issues found or lack of efficacy, then it might make the biotech rethink its IND strategy for several of these programs in the coming years.

Conclusion

The final verdict is that Prime Medicine is a great speculative biotech play to look into. The reason why I state that is because it has been able to advance its Prime Editing Technology against several indications. Some are for rare indications, but some others that are multi billion-dollar markets. For instance, you have the Cystic Fibrosis ((CF)) indication. The global Cystic Fibrosis market is expected to reach $24.35 billion by 2028 . Another indication which might be a multi billion-dollar market might be Friedrich's Ataxia. The reason why I state that is because it is expected that the global market of Friedreich Ataxia could reach $2.06 billion by 2030 . Additional preclinical data released in January of 2023 showed that the company was able to use its PASSIGE (Prime Assisted Site-Specific Integrase Gene Editing) technology in a non-viral process way. It showed that this technology was able to achieve about 60% in precise insertion of a 3.5 kilobase transgene knockdown of interest at a single targeted site in primary human T-cells. In addition, it announced other proof of concept preclinical data showing lipid nanoparticle ((LNP)) delivery of Prime Editors to the rodent liver. On top of being able to deliver Adeno-associated virus ((AAV)) to the central nervous system. Lastly, the goal of this biotech is to expand its pipeline. It will focus primarily on what I highlighted above, but it is not opposed to advancing other indications. As such, it doesn't mind establishing strategic business development deals which could go beyond what is being done by the company itself. This means that there could be the possibility of licensing and/or partnership deals that could be developed based off of its pipeline.

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