Undervalued Precigen: A Billion-Dollar Approval Waiting to Happen

Precigen, a biotech company, received FDA approval for its billion-dollar product. Despite this, the stock remains undervalued. The company's history of rapid development and recent approval warrant a reevaluation of its stock price.

Precigen Inc. (PGEN) has seen its stock surge following the U.S. Food and Drug Administration's (FDA) approval of PAPZIMEOS, a groundbreaking gene therapy for recurrent respiratory papillomatosis (RRP). The FDA's decision to grant full approval, rather than the initially expected accelerated approval, has sparked significant interest in the company's stock, with a pre-market surge of over 50% [1].

The approval marks a significant milestone for Precigen and its innovative platform. PAPZIMEOS is a non-replicating adenoviral vector-based immunotherapy designed to target the root cause of RRP, which is predominantly caused by human papillomavirus (HPV) types 6 and 11. The treatment is administered through four subcutaneous injections over a 12-week period and has shown impressive results in clinical trials, with a complete response rate of 51% [3].

The FDA's decision to grant full approval for PAPZIMEOS, despite the company's initial submission under an accelerated approval pathway, underscores the robustness of the data and de-risks the asset. This full approval eliminates the need for a confirmatory clinical trial, further validating the treatment's efficacy and safety [3].

Analysts have taken notice of the approval and its implications for Precigen's stock. Multiple analysts have issued buy ratings and raised price targets, reflecting optimism about the company's broader pipeline and the potential market opportunity for PAPZIMEOS. For instance, HC Wainwright & Co. has set a target price of $8.5, while JMP Securities and Citizens Capital Markets have both set a target of $6.0 [2].

Despite the positive sentiment and the strong market response, some investors remain cautious. The company's financial health is a concern, with Precigen holding just $59.75 million in liquid assets at the end of the second quarter and a monthly cash burn of approximately $6.3 million [3]. The recent approval of PAPZIMEOS is likely to increase the company's cash burn rate, potentially shortening its runway and necessitating a future stock offering.

In conclusion, while the FDA approval of PAPZIMEOS represents a significant achievement for Precigen, the company's stock remains undervalued. The rapid development of PAPZIMEOS and the strong market response warrant a reevaluation of its stock price. Investors should closely monitor the company's financial health and the potential launch hurdles as it promotes the newly approved treatment.

References:
[1] https://www.quiverquant.com/news/Precigen%2C+Inc.+Stock+%28PGEN%29+Opinions+on+FDA+Approval+of+Papzimeos
[2] https://www.investing.com/news/stock-market-news/precigen-stock-soars-after-fda-approves-first-rrp-treatment-93CH-4195640
[3] https://seekingalpha.com/article/4814141-precigen-this-billion-dollar-approval-is-still-undervalued