Management outlined its 3-year strategic plan, which is in line with expectations and includes a BLA submission for HAE in 2026. Overall, in 2024 we watch for the following data that could drive upside in NTLA: (1) NTLA-2001 cardiac-endpoint data showing differentiation vs. silencers; (2) NTLA-2002 data demonstrating (near) complete elimination of HAE attacks; (3) NTLA-3001 data (potentially by YE24) achieving clinical AAT levels >>11uM coupled with a clean safety profile. Further, we look for early program data from indications with a high unmet need conferring an attractive gene editing opportunity. Remaining Outperform.
NTLA-2001: (1) First-patient dosing in ATTR-CM PhIII study is guided for 1Q24, with enrollment completion in 2026 (design here); (2) Management plans to present updated PhI data in 2024, including cardiac endpoints that can offer differentiation from silencers (here); (3) Management expects HELIOS-B to be successful, but thinks there will be room for improvement on the efficacy that can potentially be offered by NTLA-2001.
NTLA-2002: (1) PhIII initiation is expected in 2H24, with the trial size being similar to previous HAE studies. Importantly, management aims to submit a BLA in 2026 and believes that the ideal TPP is a "cure" consisting of complete attack elimination; (2) Management doesn't expect any surprises from the embryonic toxicity study given the normal development of 400 animals in the germline DNA editing study; (3) Management will announce additional PhI/PhII data in 2024.
NTLA-3001: Management submitted a CTA and expects first-patient dosing in 2024. The PhI will explore variable AAV doses (LNP dose will be ~fixed). We expect the first readout by ~YE24.
Financials: Management ended 4Q23 with ~$1B in cash (runway into mid-2026). Key thoughts heading into 2024: On NTLA-2001, we look for (CV data) differentiation vs. silencers, especially following HELIOS-B readout in 1H24 that will offer visibility on silencers' effect. On NTLA-2002, we look for complete elimination of HAE attacks, which can provide differentiation and justify the benefit/risk. On NTLA-3001, we look for clinical AAT levels of >>11uM, with a clean safety profile, and potential differentiation from base editing and RNA editing therapies that are entering the clinic in 2024. On pipeline, we watch for new targeted indications (recall Rewrite had a CF program, here) that can drive further value for NTLA. Note that management won't pursue in vivo base editing due to concerns around off-target editing.
Our Outperform rating is based on our view that (1) the overhang around lack of clarity around an IND approval in the U.S. has been removed; (2) CRISPR/Cas9 IP litigations will ultimately not have any material impact on NTLA; and (3) Lead clinical programs target indications with many successful treatment options; thereby limited uptake is expected.
Our $62 target price is based on our SOTP DCF analysis driven by NPV of NTLA-2001, NTLA-2002 and NTLA-3001 and cash flows through 2035. We use a WACC of 14% based on the methodology we use for our biotech coverage (12-13% for companies with PhII data). We assign a terminal value to Intellia revenues with a growth rate of 1.0%.
Our upside case assumes positive NTLA-2001 and NTLA-2002 in ATTR and HAE. Under this scenario, the PoS of the ATTR/HAE programs increases to 65%/45% (from 60%/40%), while the discount rate decreases to 12% (from 14%), leading to a price of $84, representing ~35% upside from base case. For this scenario to materialize, we would expect no new safety signals in data updates or regulatory headwinds.
Our downside case assumes that all programs fail in clinical trials due to safety signals and/or underwhelming efficacy. Under this scenario, there will be significant uncertainty around Intellia’s platform and therefore we value Intellia at cash of ~$11, which represents ~82% downside from our base case of $62.
Key clinical catalysts for Intellia in the next 12 months include: (1) NTLA-2001 PhIII study enrollment completion; (2) Initiation of NTLA-2002 PhIII study in 3Q24; (3) Potential CTA approval of NTLA-3001 for AATD-lung disease in 1Q24.
Intellia Therapeutics is a leading genome editing company whose mission is to develop potentially curative gene editing treatments that can positively transform the lives of people living with severe and life-threatening diseases.