Originally Posted On: https://financhill.com/blog/investing/axovant-gene-therapies-stock-forecast
Axovant Gene Therapies Stock Forecast: It wasn’t long ago that gene sequencing could only be imagined. Blockbuster movies showed outlandish ideas like growing organs, creating “designer babies” absent gene mutations, and diagnosing auto-immune conditions by understanding our most basic building blocks.
Such wild imaginations are today a reality and companies like Axovant Gene Therapies are pioneering solutions that were once only imagined on the big screen.
Axovant Gene Therapies Ltd develops transformative gene therapies for patients with life-altering neurologic and neuromuscular disorders. It is a clinical-stage pharmaceutical company that develops high-impact treatments to improve the lives of patients with neurological conditions.
Based in New York, Axovant Gene Therapies (NASDAQ: AXGT) was launched in 2014 to provide clinical therapy. Previously known as Axovant Sciences, the company has gone deep into developing for the cure of dementia, among other diseases, in both America and Europe. RVT 101, the company’s candidate product, is being developed to treat mild-to-moderate Alzheimer’s disease and dementia.
Axovant Gene Therapies Limited is currently developing a broad pipeline of innovative gene therapies and drugs that have a transformative impact. With neuromuscular disorders on the rise, Axovant Gene Therapies Ltd is filling the unmet medical needs with long life therapies for lifelong benefits.
Gene therapy companies have been experiencing a downward trajectory that has been characterized by massive losses. The industry is complicated, and many people don’t seem to welcome therapeutic technologies.
In mid-2017, Axovant Gene Therapies Ltd hit a record market capitalization of $2.4 billion. The pipeline program was promising, and investors were gearing towards the company’s stocks. However, a series of failures and changes in management affected the company significantly.
Today, Axovant Gene Therapies Ltd has a market capitalization of $93.44 million. Shares have dropped by as much as 94%, bringing the question of whether this is an opportunity or rather a deepening catastrophe.
In January 2020, Axovant Gene Therapies Ltd rolled out some updates on company progress. In Q1 2020, the company expects to give out 6-month data from the first two patients who were administered with a 3-fold higher vector dosage. This, among other data reports, will showcase the development of therapy pipelines.
In the last 12 months, Axovant’s stock recorded a negative return of -53.16%. Over the previous six months, the stock had a return of -44.38%. And the stock recorded a -39.12% performance in Q4 2019.
If the recent upward trend in earnings estimates is anything to go by, then Axovant Gene Therapies stocks may be a good option for investors. However, there is no guarantee, and many investors prefer to stay out.
For nervous nellys, keep in mind that, when it comes to volatility, the company is positioned at a 1.15 beta. This indicates that stocks has more amplified movements when compared to the broader market indices.
The recent dip in value presents a risky opportunity to investors. While the company is still in the early stages of developing gene therapy pipelines, questions arise as to whether it can regain its upward trajectory.
Generally, Axovant GeneTherapies has a low patient population, and this makes it hard for investors to foresee the risk-benefit profile. The low patient population in gene therapy clinics indicates long term uncertainties and consequently, underperforming stocks.
While the market might exhibit an upturn soon, the future is foggy. The inability to get therapies performing is a worry to many investors. What if the pipeline programs do not live to see the light of the day?
These questions, among many others, are holding potential investors back. Even those holding long positions in the industry’s stocks are not sure of what the future holds.
The 2017 high market capitalization and subsequent drop are perhaps to blame for the market downturn. Other competitors in the gene therapy industry have faced the same problems of uncertainty.
Axovant Gene Therapies stock ought to be avoided at the moment. The company doesn’t rank very high in the gene therapy space, with major pharmaceutical and biopharmaceutical companies going all out to make the field highly competitive.
The gene therapy industry looks unpredictable, with many companies looking unattractive due to the massive losses. If you are contemplating investing in this industry, the best thing is to hold your horses and check the various trends that will unfold in the future.
The bottom line is that Axovant Gene Therapies are neither for the faint-hearted neither the risk-averse. Unlike other small-cap stocks that prove investors wrong, recent pipeline updates and events don’t provide investors with any reason to think Axovant Gene Therapies Ltd has a strategy in place. For now, the stock is likely too risky a bet.
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