Should You Buy Wave Life Sciences Stock?

By Kirsteen Mackay

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Wave Life Sciences is leading a new era of precision medicine in which rationally designed oligonucleotides are the key to delivering safer, more effective medicines.

Operating as a pre-clinical biopharmaceutical company Wave Life Sciences (NASDAQ: WVE) is unlocking the foundation of future therapeutics for treating debilitating genetic diseases.

What Does Wave Life Sciences Do?

Wave Life Sciences Ltd. is a clinical-stage genetic medicine biopharmaceutical company. The company focuses on utilizing its proprietary synthetic chemistry drug development platform PRISM to design, develop, and commercialize stereopure oligonucleotide therapeutics. It hopes to deliver life-changing treatments for people battling devastating diseases. 

The company develops disease-modifying drugs for indications with a high degree of unmet medical need. Driven by an unwavering sense of urgency, the Wave team targets a broad range of genetically defined diseases so that patients and families may realize a brighter future. Diseases it is targeting include Huntington's Disease, amyotrophic lateral sclerosis (ALS) and frontotemporal dementia.

The company was founded by Gregory L. Verdine and Takeshi Wada on July 23, 2012, and is headquartered in Singapore.

WVE-003 Clinical Update

In a recent clinical trial update, Wave Life Sciences showed a single dose of its stereopure oligonucleotide WVE-003 could benefit patients with early-stage Huntington's Disease (HD).

Specifically, the phase 1b/2a trial showed a single 30 mg or 60 mg dose of WVE-003 helped reduce mutant huntingtin (mHTT) protein in cerebrospinal fluid in patients with Huntington's Disease (HD) who are in the early stages and carry SNP3 in association with their cytosine-adenine-guanine (CAG) expansion.

Huntington's Disease is a rare and devastating genetic disease that causes progressive degeneration of nerve cells in the brain.

Ralf Reilmann, a member of the SELECT-HD clinical advisory and dose escalation committees, said:

These preliminary data suggest WVE-003 is working as intended: to selectively reduce the toxic mHTT protein while avoiding targeting the healthy, wild-type huntingtin protein, thereby preserving its beneficial effects in the central nervous system,

In the ongoing study, 18 people have been dosed who received different doses of the drug or a placebo. 

The company said single doses of WVE-003 up to 90 mg generally appeared safe and well-tolerated. And adverse events (AEs) were mild to moderate across all doses.

WVE-006

WVE-006 is the company's first RNA editing development candidate for Alpha-1 antitrypsin deficiency or AATD. It expects to initiate clinical development of WVE-006 next year.

With WVE-006, Wave Life Sciences hypothesize that RNA editing in homozygous or DV patients can shift the phenotype towards a heterozygous or MD phenotype, lowering the risk of disease development.

Alpha-1-antitrypsin deficiency (AATD) is a rare, inherited condition that can cause lung and liver problems.

WVE-006 is the most advanced therapeutic program currently developed to harness an endogenous enzyme for editing. Approximately 200,000 people are carrying homozygous ZZ mutations (the genetic type of AATD) in the US and Europe, and WVE-006 has the potential to transform how these patients are treated.

Chandra Vargeese, Ph.D., Chief Technology Officer and Head of Platform Discovery Sciences at Wave Life Sciences, said:

Wave continues to expand its genetic medicines toolkit of modalities and novel chemistries, enabling both the flexibility to optimally address disease biology, as well as the ability to fine-tune potency, durability of effect, and tissue distribution of our stereopure oligonucleotides.

We are excited to share the preclinical data for WVE-006 – the most advanced program to harness an endogenous enzyme for editing – as well as how we are applying AIMers to upregulate gene expression. We also are highlighting our preclinical siRNA designed with PRISM chemistry, which demonstrates remarkably robust and durable RNA silencing in vivo.

Competition

Roche runs a development program for Huntington’s disease, which includes the development of small molecules, monoclonal antibodies, and antisense oligonucleotides (ASOs). 

Like Wave, Vico Therapeutics is another small company on a mission to bring innovative therapies to patients living with genetic diseases.

There are also other companies operating detection platforms for oligonucleotide molecules.

How Does Wave Life Sciences Make Money?

Wave Life Sciences is an early-stage biopharma company carrying out R&D and does not yet make money.

Wave Life Sciences primarily funds its operations through private placements of debt and equity securities, share offerings and collaborations with third parties. 

WVE Stock Financials

Over the past year, WVE stock has traded between $1.16 and $5.24. Today it trades at $3.54. Year-to-date, the Wave Life Sciences Ltd (WVE) stock is up by 8.92%, while the S&P 500 has fallen by -23.31% over the same period.

FactSet analysts have an Overweight rating on WVE stock with a target share price of $8.42.

WVE stock has a price-to-book-value (P/BV) of 9.9, which is higher than the industry benchmark of 4.2. WVE stock does not come with a dividend.

In June 2022, Wave Life Sciences closed an underwritten offering where it sold 25,464,483 ordinary shares. It also sold pre-funded warrants to RA Capital Management to purchase up to 7,093,656 common shares at an exercise price of $0.0001 per share. These are only exercisable upon receipt of shareholder approval or if such exercise would not cause RA Capital Management to own more than 19.99% of the number of ordinary shares outstanding. If the pre-funded warrants are exercised, additional ordinary shares will be issued, causing further shareholder dilution.

Wave Life Sciences Growth Potential

Continued investment in Wave Life Sciences’ PRISM platform has positioned the company as leaders in oligonucleotide innovation.

Earlier this year, the company shared positive target engagement data from its ongoing FOCUS-C9 clinical trial and C9-ALS and FTD, which demonstrated how its pre-clinical data is now translating in patients. 

Additionally, Wave Life Sciences expects to achieve several milestones in the second half of the year, including data from all three of its ongoing clinical trials.

The company expects to submit multiple clinical trial applications for WVE-006 next year and is well-capitalized to execute all these milestones.

The expected opportunity for eventual commercial gain is not clear-cut. With regards to WVE-006, there are 200,000 patients in the US and Europe with the ZZ gene that could potentially be treated to alter their gene to the MZ genotype. Whether all 200,000 would take the treatment is debatable, and the cost associated has not been stated. 

There's also money to be made in protein replacement in the liver and lungs via a single subcutaneous injection, but again we don't know how much money can be made.

WVE Stock Risks

WVE stock went public in 2015, and its share price has been on a volatile journey since then. In the first year, its share price soared, and it climbed higher still by 2018 to reach above $50 a share. At the end of 2019, WVE stock took a significant plunge and remains sub-$5.

The company is exposed to market risk from interest rates and foreign exchange rates. Inflation could cause a rise in clinical trial, labor and operating costs.

As the company relies on funding via capital markets and investors, a tight market could make this problematic. 

Is WVE Stock a Good Investment?

Wave Life Sciences is active in promoting its platform. The company regularly appears at scientific conferences to showcase findings in its PRISM discovery and drug development platform.

There is clear potential for a clinical breakthrough to make future drug discovery simpler, but the eventual commercial opportunity is unclear.

Furthermore, the current economic backdrop makes investing in speculative stocks riskier than ever. Whether you invest in WVE stock depends on your appetite for risk and investing time horizon.

You may also like to read about Amylyx Pharma, a company developing a therapeutic for ALS. 

If you enjoyed our Wave Life Sciences coverage, you might be interested in our recent Daily Stock Watch articles or our IPO coverage.

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Topics:
Biotechnology
Industries:
Healthcare
Companies:
Wave Life Sciences

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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