JPMorgan thinks investors should flock to biotechnology company Beam Therapeutics , which the firm says stands to benefit from increased market share and a strong gene therapy pipeline. Analyst Eric Joseph upgraded the stock to overweight from neutral and upped his price target by $2 to $40, implying shares could jump a whopping 64.7% over the next 12 months. “In our view, Beam’s proprietary genetic base-editing platform provides either first or best-in-class potential across a diverse array of programs in heme and liver-mediated disease indications with advantages in editing efficiency, specificity, and editing in larger organ systems,” Joseph wrote in a Monday note. Heme is a component of hemoglobin, a protein in red blood cells. “We see BEAM outperforming our coverage over the mid-term, with current levels being an attractive entry point,” the analyst said. Beam’s stock price jumped 7% Monday. The stock is down more than 4% so far this year, and has lost more than 42% over the past 12 months. BEAM 1Y mountain Beam stock. However, according to Joseph, the company is at the frontier of a rising theme for investors this year: therapeutics. Beam has had compelling preclinical datasets, the analyst noted, saying he finds attractive and de-risked commercial opportunities for Beam in its advancements against sickle cell disease and alpha-1-antitrypsin deficiency, or AATD, which is a genetic condition that predisposes an individual to chronic obstructive pulmonary disease and liver disease. According to the analyst, Beam’s BEAM-302 therapy is “uniquely positioned” as a one-time genetic medicine for AATD, which he expects to be a strong opportunity for investors in the coming years. “We see AATD (re)building as therapeutic theme in 2024/25…With orphan disease-like pricing, we estimate a current TAM upwards of $10-15B in the U.S. alone,” Joseph said. “In view of multiple gene modifying programs getting underway in 1H24… we see AATD returning as an investor focus over the next 12-24 months.” Beam has a roughly $12 billion commercial opportunity from BEAM-302, a liver-targeting lipid-nanoparticle therapeutic that is designed to correct the PiZ mutation, which is the most common gene variant associated with severe AATD, Joseph said. “Core to our upgrade thesis is the expectation of alpha-1 antitrypsin deficiency (AATD) being a rising therapeutic theme in 2024, and BEAM-302 being a compelling gene therapy candidate with best-in-class disease modifying potential across the full breadth of patients,” Joseph said. He added that BEAM-302 is “uniquely positioned” as a one-time genetic medicine for AATD, particularly given its success in preclinical trials. Data has proven that treatment with BEAM-302 significantly increased levels of corrected and functional alpha-1 antitrypsin, while reducing mutant PiZ in many in vivo rodent disease models, according to Beam. A phase 1 trial for BEAM-302 is set to start in the first half of this year.
