Lexeo Therapeutics stock crashed Monday despite promising results for a gene therapy designed to treat heart complications of a genetic condition called Friedreich's ataxia.
The company tested its gene therapy, dubbed LX2006, in patients with cardiomyopathy, a disease that affects how well the heart pumps blood.
After a year, those who received LX2006 had an 11.4% reduction in left ventricular mass index, or LVMI. High left ventricular mass is associated with cardiovascular disease and death. After 18 months, patients had an 18.3% reduction in LVMI.
Further, patients showed improvements in levels of enzymes and proteins tied to heart health.
But shares of Lexeo Therapeutics collapsed 26.1% to 13.01 on the stock market today. That put Lexeo stock below its 50-day moving average, according to MarketSurge. Shares had been forming a cup base with a buy point at 22.33.
Lexeo stock has a strong IBD Digital Relative Strength Rating of 96, meaning shares ranked in the top 4% of all stocks when it comes to 12-month performance.
Lexeo Therapeutics Focuses On Two Ongoing Studies
Leerink Partners analyst Mani Foroohar was upbeat, and retained his outperform rating on Lexeo stock. He acknowledged that bears are arguing the data isn't strong enough for Lexeo Therapeutics to seek accelerated Food and Drug Administration approval.
"Timeline impact/further dose exploration notwithstanding, we see the other sides of the argument are more compelling," he said in a report. "Progressive LVMI improvement through 18 months and high proportion of patients achieving greater than 10% LVMI improvement offer enough evidence of (effectiveness) for Lexeo to design a pivotal study with a reasonable (number of patients)."
He sees Lexeo putting out finalized results in 2025.
Lexeo Therapeutics attempted to determine the functional benefit for patients by measuring their VO2 max, a measure of cardiorespiratory fitness. But RBC Capital Markets analyst Luca Issi noted that's not an optimal goal to measure function.
Improvements Grow Over Time
Other measures were promising, however, Issi said. Patients given the gene therapy showed improvements in the thickness of the left ventricular wall of the heart. That wall becomes thicker as a result of elevated pressure within the heart due to the poor pumping action associated with cardiomyopathy.
Importantly, the "magnitude of the LVMI benefit is on par with what has been seen for other cardiac drugs," he said in a report. "The LVMI benefit appears to 'improve' over time (and) the LVMI benefit is supported by improvements in lateral wall thickness."
Issi maintained his outperform rating and 24 price target on Lexeo stock.
Lexeo also noted improvements in troponin I and frataxin. Troponin I is an enzyme tied to heart muscle injury. Troponin I levels declined by an average of 53.3% over a year. Frataxin is a protein involved in the metabolism of iron. Those levels increased in all patients evaluated.
Notably, there were no safety concerns associated with the gene therapy studies — one from Lexeo called Sunrise-FA and another from researchers at Weill Cornell Medicine.
Lexeo Therapeutics is now planning to run additional testing with results expected in the fall.
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