SVB Leerink downgraded Abeona Therapeutics (NASDAQ:ABEO) to “market perform” from “outperform” and slashed its price target to $1 from $5 after stronger-than-expected data from competitor Krystal Biotech (NASDAQ:KRYS).
On Nov. 29, shares of Abeona closed at 64 cents, down 8 cents, while Krystal shares jumped $48.43 to finish at $88.24 after trading as high as $102.99.
Krystal on Wednesday reported positive top-line data from the Phase 3 GEM-3 study of Vyjuvek in dystrophic epidermolysis bullosa (DEB). “We believe the robust treatment effect shown in wounds treated with the topical gene therapy raises the competitive bar Abeona faces in DEB,” writes analyst Mani Foroohar, M.D.
Abeona’s EB-101 is likely to be a direct competitor in DEB gene therapy, and the large treatment effect seen in Vyjuvek-treated wounds, combined with an illustrative, and dramatic, example of potential closure in large wounds during a Krystal webcast on Nov. 29, “runs counter to the bull thesis that Abeona’s skin graft-based gene therapy could hold a decisive advantage in healing large wounds,” he added.
Dr. Foroohar said that while there could be room for trading to the upside on positive top-line EB-101 data in the third quarter of 2022, the “risk-reward into this data is less clearly appealing in the face of stronger-than-expected competitor data, and a financing overhang, with the company at approximately one year of cash on hand.”
