2023-03-05 16:46:05 ET
Summary
- Verve Therapeutics is a gene editing company focused on revolutionizing the treatment of cardiovascular diseases.
- The company’s research focuses on two genes, PCSK9 and ANGPTL3 - the lead product candidate, VERVE-101, aims to treat Heterozygous Familial Hypercholesterolemia (HeFH).
- Verve's financial position is strong, with a cash position of $550.7 million as of September 30, 2022.
- The company has faced a setback with the U.S. FDA placing a hold on its IND application for VERVE-101, but is working quickly to resolve this.
Verve Therapeutics (NASDAQ: VERV ) is a cutting-edge gene editing company revolutionizing the treatment of cardiovascular diseases. Despite strong competition from established players such as Editas Medicine, Intellia Therapeutics, and Beam Therapeutics, Verve stands out through its innovative approach and proprietary technology. Traditional valuation metrics for biotechnology companies are not suitable for Verve due to its relatively new technology and status as a younger company.
The best way to evaluate Verve's potential is from a growth perspective. With strong financial support and a talented team of experts in gene editing, their future looks bright. Moreover, the market for gene editing medicines for cardiovascular disorders is expected to expand rapidly in the years ahead. Given Verve's core technology, it is likely that it will be able to immediately begin competing for market share as soon as their first product reaches market. Overall, Verve Therapeutics' future looks to be quite bullish, and the company stands to gain significant value once its first product reaches market out of the clinical stage.
Financial Position
Verve's cash position is a primary indication of its financial robustness. The company held $360.4 million as of December 31, 2021 and this impressive figure increased to $550.7 million as of September 30, 2022, representing an increase of $190.3 million in under nine months. It is anticipated that the current funding will suffice until the second half of 2025, thus providing Verve with adequate time to conduct their research and development activities.
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The R&D expenditures further demonstrate the fiscal soundness of Verve. During the third quarter of 2022, they expended $35.2 million on R&D — more than double what had been spent during the same period last year ($17.5 million). This demonstrates Verve’s commitment to perfecting gene-editing therapies, implying the importance these treatments possess.
Additionally, G&A spending increased from $6.0 million in the third quarter of 2021 to $9.6 million in the same period this year, indicating Verve's dedication to making large investments in infrastructure that are key for furthering their business endeavors and growth.
It should be noted that the gain in cash involved a shareholder dilution due to equity issuance. This could be perceived as a net negative for shareholders, but I would take a long-term view and argue for its necessity. At current expenditure rates, between R&D and G&A spending, Verve would burn through its cash position in less than three years (roughly 12 quarters). As a company that is in the pre-market phase and developing multiple products, it is critical that there is enough cash to fuel any sudden research costs that may arise from pipeline setbacks. Given this, a short-term shareholder dilution to cement a future with a product successfully reaching market is not necessarily negative.
Despite the mounting net losses from $22.7 million in the third quarter of 2021 to $45.2 million in the third quarter of 2022, we must remember that the biotech industry is quite volatile — investing heavily in research and development often goes hand-in-hand with high expenses. Taking this into consideration, Verve's studies regarding gene-editing remain at their early stages.
An Innovative Drug Pipeline
Verve Therapeutics specializes in developing one-time in vivo gene editing treatments for cardiovascular diseases ((CVD)). The company is currently concentrating on two genes, PCSK9 and ANGPTL3 , that have been thoroughly confirmed as targets for decreasing blood lipids and reducing the risk of heart attack and ASCVD.VERVE-101, which is the company's primary product candidate, is a single-session in vivo liver gene editing treatment created for patients with Heterozygous Familial Hypercholesterolemia (HeFH). This genetic anomaly in the LDLR gene causes exceedingly elevated levels of LDL-C in the bloodstream in HeFH patients, resulting in cholesterol build-up in the arteries that ultimately leads to heart attack or stroke.
VERVE-101 is an intriguing new technique for gene editing, which uses mRNA, gRNA, and a special type of nanoparticle made of lipids (LNP) to target the PCSK9 gene in the liver.
A recent preclinical study confirmed its effectiveness: 67% whole liver DNA editing, 89% reduction in PCSK9 protein levels, 59% decline in LDL-C level. Moreover, positive effects of VERVE-101 persisted for six months after treatment and no significant side-effects were noticed.
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Verve Therapeutics is working on a gene-editing program that focuses on ANGPTL3, which regulates cholesterol and triglyceride metabolism. ANGPTL3 is an attractive target for treating severe hyperlipidemia, particularly for individuals with Familial Hypercholesterolemia (FH), including those with Heterozygous Familial Hypercholesterolemia (HeFH) and Homozygous Familial Hypercholesterolemia (HoFH). Verve Therapeutics intends to use the same incremental development process for ANGPTL3 as it did for its lead product, VERVE-101.
Recent Developments
Verve Therapeutics has made several recent announcements about its key pipeline programs. While the company's lead program, VERVE-101, has faced a temporary delay due to the U.S. Food and Drug Administration's (FDA) hold on its IND application, Verve is dedicated to working closely with the FDA to address the issue and begin dosing as soon as possible. VERVE-101 is designed to turn off the PCSK9 gene in the liver to reduce LDL-C and treat HeFH.In the heart-1 Phase 1 clinical trial in New Zealand and the United Kingdom, VERVE-101 has demonstrated promising results, with all three patients in the first dose cohort tolerating the treatment well and no treatment-related adverse events reported thus far. The independent Data Safety Monitoring Board has reviewed the safety data and recommended advancing to the next planned dose level. Verve plans to release safety and pharmacodynamic data for all dose cohorts in the latter half of 2023.
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Verve Therapeutics has started IND-enabling studies for its VERVE-201 ANGPTL3 program, which aims to permanently silence the ANGPTL3 gene in the liver as a treatment for HoFH. Recently, preclinical data for VERVE-101 was released in Circulation and presented at the American Heart Association's (AHA) 2022 Annual Meeting. The data showed that the treatment had a lasting effect on reducing blood PCSK9 protein and LDL-C levels, without any indications of editing the PCSK9 gene in germline tissue.
Risks In the Gene Editing Market
The gene editing medicines market for cardiovascular diseases is a rapidly expanding industry with immense potential, but there are various current and future risks that need to be analyzed. One of the biggest current risks is the regulatory hurdles faced by the industry. The field of gene editing is still in its nascent stage, and regulatory agencies such as the U.S. Food and Drug Administration (FDA) are struggling to keep up with the rapid advancements. This has led to increased scrutiny and delays in getting new drugs approved, as highlighted by the recent hold placed on Verve Therapeutics' IND application for its lead drug, VERVE-101.
Another current risk is the public perception of gene editing medicines . Due to the relatively new nature of the field, there is still a significant amount of skepticism and lack of understanding among the general public. This can result in a lack of patient willingness to participate in clinical trials, slowing down the development process and potentially hindering the growth of the market. Additionally, as the gene editing medicines market continues to grow, competition is likely to increase, further adding pressure on Verve Therapeutics to differentiate its offerings and maintain its competitive edge.
In the future, alternative therapies with fewer side effects have the potential to replace gene-editing medicines. However, this technology is currently in its early stages and has various technical issues that may prove difficult to overcome. Additionally, insurance companies are unlikely to cover the high costs of these drugs, which makes them inaccessible for many people and limits the market growth for gene-editing medicine.
Facing Competition
Verve's main rivals in the gene editing industry are Editas Medicine, CRISPR Therapeutics, Intellia Therapeutics, and Beam Therapeutics. Additionally, Novartis and Pfizer may be viewed as indirect competitors, since they make treatments for diseases of the cardiovascular system.
As Verve is still in a pre-market phase, its financials and balance sheet are less mature than that of its competitors. Despite this, Verve has raised over 200 million dollars through investments and deals with leading pharmaceutical companies, which could benefit them further down the line.
Compared to Editas Medicine, Verve's specialization on cardiovascular disease could prove to be an advantage as the gene editing market focused on this area is projected to grow over time. In contrast, Editas has a wider scope on genetic diseases and has already progressed multiple programs into clinical trials. Nonetheless, their lack of emphasis on cardiovascular disease might be seen as a potential weakness given the expanding market.
Intellia Therapeutics too holds a broad portfolio covering genetic disorders, but faced some issues with one of their clinical studies being terminated in 2020. This factor may serve as a dissuasion for investors looking to invest in gene editing products.
Beam Therapeutics stands as another competitor interested in genetic diseases, who have propelled various programs into clinical trials . Although only recently going public and having no products currently available on the market, their initial public offering ((IPO)) and strong finances offer positive forecasts for the future.
Valuation Concerns
Verve Therapeutics is a newer player in the gene editing medicines market, specifically in the cardiovascular diseases space. Traditional valuation metrics such as price-to-earnings ratio or price-to-book value are not relevant or appropriate when evaluating this company's position.
However, from an expansion perspective, Verve Therapeutics has excellent positioning within their sector. They are at the forefront of a new and growing field of gene editing which could potentially revolutionize the treatment of cardiovascular illnesses. With focuses on precision gene editing and top management with proven track records of success, the company is set to benefit from this growth potential.
In addition, choosing to use in vivo editing instead of ex vivo can be revolutionary for gene editing procedures. In vivo editing allows for editing genes inside the body which eliminates the need to take out cells and put them back in. This is more effective, cost efficient, and less invasive than its counterpart.
Partnerships wise, Verve has cemented collaborations with industry leading pharmaceutical companies, enforcing the confidence of their technology and strategies. These relationships give them a competitive advantage that prepares them for further development and future achievements.
Conclusion
In conclusion, Verve Therapeutics is an innovative company at the forefront of gene editing technology in the cardiovascular space. Their unique focus on editing genes in the liver to treat cardiovascular disease sets them apart from their competitors and gives them a strong competitive advantage. The company's technology, clinical progress, and partnerships with leading organizations position them well for growth and success in the future. While the gene editing industry is still relatively new, it's clear that there is a growing demand for gene editing treatments for various medical conditions. Verve Therapeutics is well-positioned to meet this demand and capitalize on the growth opportunities in the industry.
Investing in Verve Therapeutics requires patience, as the company is still in its early stages. Nevertheless, it promises great rewards. With their cutting-edge treatments for cardiovascular disease and a highly qualified team of individuals leading the charge, Verve Therapeutics has the potential to become a frontrunner in gene editing technologies. For investors that are eager to find an enterprise with high prospects for success and able to have a prolific influence on the healthcare sector, Verve Therapeutics should be given close attention.
For further details see:
Verve Therapeutics: VERVE-101 On Hold, But Technology Remains Sound