"Cheap Investor" Sees Value at Applied Genetic Technologies

03/13/2018 5:00 am EST


Bill Mathews

Editor & Founder, The Cheap Investor

Applied Genetic Technologies (AGTC) is a clinical-stage biotechnology company that uses a proprietary gene therapy platform to develop transformational genetic therapies for patients suffering from rare and debilitating diseases, explains Bill Mathews, editor of The Cheap Investor.

Its initial focus is in the field of ophthalmology, where it has active clinical trials in X-linked retinoschisis (XLRS), achromatopsia and X-linked retinitis pigmentosa (XLRP). In addition to its clinical trials, AGTC has preclinical programs in optogenetics, adrenoleukodystrophy — a disease of the central nervous system — and otology.

The clinical-stage XLRS and XLRP programs, the discovery program in ALD and two additional ophthalmology programs are being developed in collaboration with Biogen (BIIB).

AGTC also has a significant intellectual property portfolio and extensive expertise in the design of gene therapy products including capsids, promoters and expression cassettes, as well as expertise in the formulation, manufacture and physical delivery of gene therapy products.

It also has collaboration agreements with 4DMolecular Therapeutics, Synpromics Limited, and Bionic Sight, LLC, as well as the University of Florida Research Foundation.

We recommended the stock back in October at $3.60, and it moved up 53% to a high of $5.50 in just four months. Since the price has fallen back, we are recommending it again.

The company has a healthy balance sheet with $120 million ($6.61 per share) in cash, a book value of $6.38 per share and no debt. Insiders own 17% of the 18 million shares outstanding, and 80 institutions own 46% of the float (shares in public hands).

We like ACTG because it has several products in Phase 1/2 clinical trials and collaborations with some major pharmaceutical and research facilities. Positive news on any of its clinical trials could cause the stock to move up significantly because it has only 18 million shares outstanding.

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