Neurogene Shares Tank After Adverse Event Linked to Early-Stage Rett Syndrome Gene Therapy

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Analysts did not seem very concerned by the treatment-related serious adverse event, noting that NGN-401 was well-tolerated at a lower dose and showed promising efficacy outcomes.

Neurogene Inc. on Monday released Phase I/II data for its investigational gene therapy NGN-401, touting “consistent, concordant and durable” symptom improvements in patients with Rett syndrome. However, the higher dose of the gene therapy was linked to one treatment-related serious adverse event, leading to a 35% drop in Neurogene’s stock price in after-hours trading on Monday.

Affecting 1 in every 10,000 female births worldwide—and even fewer males—Rett syndrome is a rare genetic and neurological disorder characterized by progressive loss of motor skills in babies, alongside compromised language and overall developments. Other symptoms include seizures, scoliosis and breathing problems.

The biotech spotlighted efficacy data for NGN-401, noting that even at the low dose of 1E15 vg, the first four treated patients reached a rating of “much improved” on the clinician-rated Clinical Global Impression Scale of Improvement—indicative of a clinically meaningful effect. The gene therapy also elicited improvements in the caregiver-completed Rett Syndrome Behavior Questionnaire.

All patients also hit developmental milestones or acquired skills in at least one core clinical domain of Rett syndrome, including ambulation and gross motor, language and communication and hand function and fine motor. Improvements and new skills in these domains deepened over time, according to Neurogene’s news release.

At its low dose level, NGN-401 was also well-tolerated, with most side effects being known toxicities associated with the AAV vector. There were no seizures or intracerebroventricular adverse events.

While there was one treatment-related serious adverse event among patients who received the higher dose of the gene therapy, 3E15 vg, it remains unclear what this side effect was.

Despite NGN-401’s promising efficacy data, investors appeared to be more concerned by the gene therapy’s safety signal. Neurogene shares dropped from $46.67 from $71.53 in after-hours trading Monday.Still, analysts said that on balance, Monday’s readout leans in favor of Neurogene. BMO Capital Markets’ Keith Tapper and Evan Seigerman wrote in an investor note that NGN-401’s Phase I/II data were “strong,” highlighting that the treatment’s “gains were consistent, durable, deepened over time, and demonstrated improvements not expected based on natural history data.”

“NGN-401 is working for patients with Rett syndrome,” the BMO analysts said, pointing out that the biotech’s negative share reaction is a “likely overreaction” to the safety outcome, though they concede that this signal will need clarification from the company. “We continue to see Neurogene as a leader in Rett gene therapy, which we estimate to be a $2.5B opportunity,” they added.

Truist Securities’ Joon Lee likewise does not seem to be too concerned by the adverse event. “Indeed, the 3E15 dose is on the high side,” Lee wrote in an analyst note, adding that “given proximity of the [serious adverse event] to timing of the dosing, it’s most likely known [adverse events] related to AAVs,” though he added that further clarity is needed from the company.

Stifel’s Paul Matteis conceded that the strongest “pushback” for NGN-401 will come from this safety signal, but emphasized that the safety profile of the lower dose looks relatively clean.

“As we see it, this will all probably end up okay for NGNE given their low dose—which is 3x lower than the high dose—looks efficacious,” Matteis added, noting that Monday’s data “transcend the signal-to-noise ratio on efficacy, showing what looks like a real clinical benefit across four pediatric Rett patients.”

Tristan is an independent science writer based in Metro Manila, with more than eight years of experience writing about medicine, biotech and science. He can be reached at tristan.manalac@biospace.com, tristan@tristanmanalac.com or on LinkedIn.
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