Neurogene stock collapsed, again, on Monday after the company scrapped the high dose of its experimental Rett Syndrome treatment following a serious side effect.
The patient received a high dose of Neurogene's drug on Nov. 5. She later experienced signs of a systemic hyperinflammatory syndrome, which causes widespread inflammation in response to a harmful stressor. The patient is currently in critical condition, Leerink Partners analyst Mani Foroohar said in a report.
As a result, Neurogene suspended enrollment in the high-dose arm of its Rett Syndrome study. That will impact timing of enrollment in the low-dose part of the study. Neurogene no longer expects to finish enrolling that side of the study in the fourth quarter.
"High-dose suspension makes sense, as low-dose (effectiveness) offers a path to approval," Foroohar said. "From a stock perspective, despite this tragedy, timing for pivotal trial design update, the (total addressable market) in Rett Syndrome and potential approval year are broadly unchanged."
But, at the close on today's stock market, Neurogene collapsed 42.6% to 19.82, extending recent losses. Shares plummeted 44.1% on Nov. 12 after the company first reported the side effect. After topping out at 74.49 in intraday trades on Nov. 11, shares of Neurogene have lost more than 73%.
Low-Dose Group Shows Promise
Rett Syndrome is a rare genetic disease that can cause developmental, cognitive and movement challenges. In the low-dose group, all four patients showed improvements in hand function, gross motor function and communication.
Side effects in the low-dose group were mild and short-lived.
Leerink's Foroohar noted hyperinflammatory syndromes are associated with the type of gene therapy Neurogene is testing.
The company confirmed it's still planning to provide an update on the final study needed to gain Food and Drug Administration approval in the first half of next year. Enrollment and ability to screen and dose patients in the low-dose group remain intact.
He kept his outperform rating on Neurogene stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
