Intellia’s Pipeline Continues to Make Progress

Intellia Therapeutics NTLA posted fourth-quarter results in line with our expectations, and its pipeline candidates are continuing to progress in development. We maintain our positive outlook and fair value estimate of $85 per share. We view the stock as very undervalued, currently trading in 5-star territory. Collaboration revenue totaled $52 million for the year, representing a 58% increase from 2021. Intellia’s collaboration revenue was primarily driven by its joint venture with AvenCell Therapeutics and revenue from its license agreement with Kyverna Therapeutics.

As an emerging biotech company with no marketed drugs, Intellia does not possess an economic moat. Intellia provides long-term investors with a high degree of risk tolerance with pure-play exposure to novel gene editing technology. We see a very high level of uncertainty related to regulatory approvals for the company’s early stage portfolio and a range of potential outcomes. We believe Intellia merits a positive moat trend due to its developing pipeline spanning many rare diseases, which we view as possessing strengthening intangible assets. Intellia ended 2022 in a healthy financial position with about $1.3 billion in cash, up from $1.1 billion at the end of 2021, which will continue to support R&D efforts.

Intellia recently initiated the global phase 2 study of NTLA-2002 outside of the U.S., which is a CRISPR-based, potential single-dose treatment for hereditary angioedema. If approved, we forecast NTLA-2002 could reach the market as early as 2026. Additionally, Intellia is continuing to make progress in its phase 1 study of NTLA-2001 for the treatment of ATTR amyloidosis with cardiomyopathy and polyneuropathy. We anticipate Intellia’s ATTR program could become a blockbuster and generate over $1 billion annually toward the end of our 10-year forecast. We assign NTLA-2001 in cardiomyopathy a 25% probability of approval in our base case, and we forecast it could reach the market as early as 2025.