HCW starts Homology Medicines at buy; PT $36


H.C. Wainwright initiated coverage of Homology Medicines (NASDAQ:FIXX) with a “buy” rating and $36 price target. The stock closed at $24.03 on Feb. 19.

Analyst Debjit Chattopadhyay writes that Homology's platform leverages two differentiated and complementary assets: novel adeno-associated virus (AAV) variants derived from CD34+ stem cells, termed AAVHSCs; and a nuclease-free, homologous DNA repair (HDR) mechanism, which he refers to as “the road less traveled in the race for gene editing.”

Homology Medicines is deploying these two assets independently, as in the case of its lead drug candidate, HMI-102; and complementarily, as in the case of its HMI-103 candidate.

“While HMI-102 is a traditional gene therapy designed to provide durable clinical benefit for adult phenylketonuria patients, HMI-103 leverages the HDR pathway in conjunction with AAVHSCs, to deliver a gene editing option in the pediatric setting,” Mr. Chattopadhyay said.

He views a safety-centric update from HMI-102 by the end of 2019, as a “significant de-risking event for the company, as a clean bill of health for the AAVHSCs vector could have positive platform-wide implications.”

Stephen Kilmer