Shares of Avidity Biosciences RNA rose more than 12% on Wednesday after the company announced that it is expanding its current RNA-based pipeline of rare muscle disorders to explore a new therapeutic area — precision cardiology.
Avidity Enters the Cardio Space With Two New Drugs
The company has decided to advance two new wholly-owned pipeline drugs, AOC 1086 and AOC 1072, targeting two rare genetic cardiomyopathies, PLN cardiomyopathy and PRKAG2 syndrome, respectively.
There is currently no FDA-approved therapy for PLN cardiomyopathy and PRKAG2 syndrome, which are caused by mutations in the PLN and PRKAG2 genes, respectively. An excess build-up of these genes can lead to arrhythmias, sudden cardiac arrest, heart failure and other complications.
Per management, both AOC 1086 and AOC 1072 have been designed to address the root causes of the genetic diseases. Based on preclinical studies conducted by Avidity, both drugs have demonstrated robust delivery of siRNA (a type of RNA molecule) against targets in the heart and reduced the number of disease-causing genes by nearly 80%.
Avidity plans to present preclinical data from the AOC 1072 study at the American Heart Association Scientific Sessions 2024 on Nov. 16.
RNA Shares Glimpse of Innovations in RNA Space
Avidity also shared the first look at next-generation technology innovations in the RNA space, including modifications in siRNA delivery and advanced antibody engineering.
In preclinical studies, these advancements have shown up to a 30-fold increase in siRNA delivery to skeletal muscle and extended durability, achieving sustained target inhibition for three months. Based on these improvements, management believes that there is an opportunity to explore less frequent dosing options and enhance patient convenience.
RNA Stock Performance
Following the news, shares of Avidity hit an all-time high of $55.98. Wall Street has been paying a lot of attention to the stock, thanks to the impressive clinical performance of its rare muscle disorder pipeline. Per management, Avidity was the first company to successfully deliver siRNA to skeletal muscles. Preclinical studies showed that it has achieved a similar success against targets in the heart.
With this latest announcement, investors were likely impressed as the company is not just limiting itself to one segment but also exploring other medication areas like cardiology, which have shown immense commercial potential over the years.
Year to date, Avidity’s shares have skyrocketed 480% against the industry’s 3.8% decline.
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Factors Driving RNA Stock’s Rally
With no marketed drugs in its portfolio, Avidity Biosciences highly depends on its pipeline drugs for growth. This upside in RNA stock is being driven by the encouraging clinical development of its three rare neuromuscular programs — del-desiran for myotonic dystrophy type 1 (DM1), del-brax for facioscapulohumeral muscular dystrophy (FSHD) and del-zota for Duchenne muscular dystrophy (DMD).
The most advanced candidate in Avidity’s pipeline is del-desiran. Last month, the FDA removed a partial clinical hold on the drug placed in 2022 following news of a patient experiencing a serious adverse event in a phase I/II study. Removing the clinical hold provides a re-assurance for the drug’s safety profile. Del-desiran has been granted breakthrough therapy, orphan drug and fast track designations by the FDA in DM1 indication. Earlier this year, management started the late-stage HARBOR study on the drug in DM1 patients. The study is currently enrolling participants.
The other two candidates, del-brax and del-zota, are being evaluated in separate phase I/II studies for FHSD and DMD indications, respectively. Earlier this year, management reported encouraging initial data from these studies that demonstrate the potential of Avidity’s candidates in both indications.
Earlier in June, management reported encouraging initial data from the del-brax study that showed significant reductions in DUX4-regulated genes, the underlying cause of FHSD. Currently, there is no approved therapy for FHSD.
In August, RNA reported data from the del-zota study which showed that treatment with the drug for four months led to statistically significant increase of 25% of normal in dystrophin production and 37% rise in exon 44 skipping in DMD patients who are amenable to this skipping.
RNA’s Zacks Rank
Avidity currently carries a Zacks Rank #3 (Hold).
Avidity Biosciences, Inc. Price
Avidity Biosciences, Inc. price | Avidity Biosciences, Inc. Quote
Key Picks Among Biotech Stocks
Some better-ranked stocks from the sector are Castle Biosciences CSTL and Biogen BIIB. While CSTL currently sports a Zacks Rank #1 (Strong Buy), BIIB carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Castle Biosciences’ 2024 loss per share have narrowed from 58 cents to 8 cents. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.13 to $1.88. Year to date, shares of Castle Biosciences have surged 51.9%.
CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.
In the past 60 days, estimates for Biogen’s 2024 EPS have increased from $16.12 to $16.38. EPS estimates for 2025 have improved from $17.09 to $17.16. Year to date, shares of Biogen have lost 35%.
Biogen’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 9.99%.
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