Taysha Gene Therapy (NASDAQ: TSHA) stock is up 200% and change. TSHA stock rose on encouraging results from a trial, but very much more importantly on a stock placing to raise $150 million. That second is obviously dilutive - the market capitalisation before it was under $50 million - but it removes the financing worry very nicely indeed. There is still a runway for the firm that is. Given that the stock issue was above market price (90 cents, as opposed to around 70 cents) it’s also a significant vote of confidence by the investors, led by RA Capital Management. There’s definitely an air of, well, if they value it higher than everyone else then perhaps we all should too?
The specific of the fundraise is: “Gene therapy company Taysha Gene Therapies (NASDAQ:TSHA) said on Monday that it has entered into a securities purchase agreement for an ~$150M private placement financing. The financing is expected involve a sale of an aggregate of 122.41M shares at $0.90 per share, and pre-funded warrants to purchase up to an aggregate of 44.25M shares at $0.899 per pre-funded warrant.”
As to what drove that higher valuation, there’s also this: “Citing results from REVEAL’s low-dose cohort, Taysha (TSHA) said that the first adult patient to receive TSHA-102 tolerated the investigational therapy well, indicating no treatment-emergent serious adverse events over six weeks. Additionally, four weeks after the treatment, the patient demonstrated improvements across key efficacy measures, including the Rett Syndrome Behavior Questionnaire (RSBQ).” This is Phase I/II trials, so the question is firstly, does it poison the patient, then secondly does it do anything useful? The thing about Phase I/II trials is that even if the answers are no and yes there’s still a considerable way to go.
Taysha Gene Therapies stock price from Google Finance
The assumption is that the trial results are good enough that RA Capital is willing to back the company further. Which is great, obviously value changing information. But it’s also a very large change in circumstances. For only a few months back Taysha was closing down operations: “Taysha Gene Therapies faces the potential delisting of its shares for trading below their required minimum price—the latest in a series of setbacks for the Dallas-based company, which recently canceled plans for a $75-million manufacturing facility in Durham, NC.” Closing down planned operations at least.
As to the therapy itself: “Most cases of Rett are caused by variants in the MECP2 gene, which provides instructions for making a protein of the same name. Known to regulate the activity of other genes, the MECP2 protein is critical for brain development and function.
Occurring primarily in females, a lack of MECP2 leads to Rett symptoms such as developmental delays, intellectual disabilities, inability to communicate, seizures, motor and breathing problems, and a shortened life expectancy.”
The market is going to be small - Rett Syndrome is now a common ailment. However, as a gene therapy it should be a once off treatment and the price that can be charged will be very high indeed. Assuming that it does, in the end, work, there’s a considerable opportunity for Taysha here.
