Voyager Therapeutics signs another neurodegenerative disease deal with AbbVie that screams “Buy this small cap now.”

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The News:

Voyager Therapeutics Inc. (Cambridge MA) struck a deal with AbbVie Inc. (North Chicago) to develop and commercialize vectorized antibodies directed at pathological species of alpha-synuclein for the potential treatment of Parkinson’s disease and other diseases characterized by the abnormal accumulation of misfolded alpha-synuclein protein.

A hallmark of Parkinson’s disease is the accumulation of misfolded alpha-synuclein that can eventually lead to the formation of protein deposits and progressive neurodegeneration. For years limits to delivering effective biologic therapies for neurodegenerative diseases such as Parkinson’s have persisted due to the difficulties of crossing the blood-brain barrier.

Voyager’s vectorized antibody platform aims to circumvent the limitation of the failures to cross the blood-brain barrier. The platform uses a one-time intravenous treatment of the genes that encode for the production of therapeutic antibodies using the company’s adeno-associated virus capsids. The company said this approach has the potential for higher levels of therapeutic antibodies in the brain compared with current systemic administration of antibodies.

“Our scientific platform allows us to develop unique AAV gene therapies that are designed to knock down disease-causing gene expression, increase the expression of missing proteins, or enable the expression of therapeutic antibodies through vectorization,” Andre Turenne, president and CEO of Voyager Therapeutics said. “We are excited to expand our efforts towards pathological species of alpha-synuclein given its role in the progression of disease, and AbbVie is the ideal partner to advance this new target and therapeutic modality.”

For Cambridge, MA-based Voyager, the strategic collaboration, could be worth more than $1 billion through Phase 1 development. Under terms of the deal, AbbVie will pay Voyager $65 million in upfront money. Voyager can earn an additional $245 million in preclinical and Phase 1 option payments. Voyager can also earn an additional $728 million in potential development, regulatory, and commercial milestone payments and royalties. Additionally, Voyager will be eligible to earn up to a total of $500 million in commercial milestones. Voyager shares closed last week up 52% to $16.34, while AbbVie slipped 1% to $80.25. (Ref: BioSpace)

Steve’s Take:

What’s all the hullabaloo about?

Simple. The reason why megastar biopharma AbbVie chose to expand the partnership with tiny Voyager is because the latter has the adeno-associated virus (AAV) capsid technology, says Seeking Alpha. In a nutshell and translated into English, this technology from Voyager allows a one-time gene therapy intravenous infusion using these AAV capsids. The goal is to get the gene therapy easily through the blood-brain barrier in hopes of improving clinical outcomes for these patients with neurodegenerative diseases.

Voyager is a much sought-after biotech because of its vectorized antibody platform. The most important aspect is that its technology bypasses the blood-brain barrier in a more efficient manner. More genetic material may be delivered through the use of AAV capsids (protein shells), as opposed to other available treatments with frequent systemic injections.


According to the 10-Q SEC filing, Voyager Therapeutics has $179.6 million in cash, cash equivalents, and marketable debt securities as of September 30, 2018. However, the two latest partnerships announced recently in 2019 add an additional $230 million. That brings the total cash position to about $409 million.

Terry Chrisomalis at Seeking Alpha notes that Voyager Therapeutics can achieve huge milestone payments with its latest deal from AbbVie. Of course the risk is that the program is still in the embryonic stages of development and thus can definitely fail. Obviously, it will be important to monitor how the preclinical studies progress. That’s because if they don’t do as well in the intended target indications, then the deal with AbbVie may eventually be scuttled. Chrisomalis says Voyager’s vectorized antibody platform has been viewed optimistically with evidence of preliminary positive results from the Phase 1b using VY-AADC in patients with Parkinson’s.

Chrisomalis adds that, “In addition, the launching of the parallel Phase 3 study for VY-AADC may yield another shot on goal that could potentially reduce investor risk.”

The most tangible impact of Voyager’s deal with AbbVie is a delightful infusion of brute cash. Voyager continues to burn through more than $20 million each quarter. Cash burn is likely to increase as the company advances its preclinical candidates into early-stage clinical studies.

A partnership with a major drugmaker possessing AbbVie’s cachet also helps lift investors’ enthusiasm about the prospects for Voyager’s experimental therapies. AbbVie already has an approved drug for treating Parkinson’s disease, Duodopa. The Big Pharma also has an experimental Parkinson’s drug, ABBV-951, in Phase 1 testing.

This is the second significant deal in rapid succession for Voyager Therapeutics. On Jan. 29, 2019, the company announced that it was licensing four gene-therapy programs to Neurocrine Biosciences for an upfront of $165 million and up to $1.7 billion in potential milestone payments.

Clearly, for Voyager to make the most of its collaboration with AbbVie, it will have to deliver the goods, says Motley Fool. If all goes well, AbbVie has the option to select one or more vectorized antibodies to move into Phase 1 clinical studies. This would set the stage for Voyager to receive hefty option payments.

To reiterate its opportunity, if Phase 1 testing is successful, AbbVie then has an option to license the selected program for continued clinical development and future global commercialization. That’s when the big payday for Voyager could materialize. (Emphasis on “could.”)

Yes, it’s still quite early for all this commercial promise. Considering the recent collaboration events, all eyes and ears were tuned in to Voyager’s Q4 update on Feb. 26, 2019. Here is their upbeat takeaway:

“Based on the Company’s current operating plan, Voyager expects to end 2019 with cash, cash equivalents and marketable debt securities of approximately $280 million to $290 million. This includes the anticipated upfront payment of $165 million and expected reimbursement of development costs from the Neurocrine collaboration, as well as the $65 million upfront payment from the recently announced AbbVie collaboration.”

“Operating expenses in 2019 are expected to range from $130 million to $140 million, including amounts reimbursable under the collaborations. Voyager projects that its cash, cash equivalents and marketable debt securities, including amounts to be received under the recently announced Neurocrine and AbbVie collaborations, will be sufficient to fund operating expenses and capital expenditure requirements into mid-2022.”

Bottom Line:

Voyager has a current market cap of $533 million, placing it squarely in the Small Cap biotech group.

Among the 11 analysts who cover Voyagers, their mean consensus rating is “Outperform.”

Their 12-month average price target (APT) is $23.50. The company’s last share price was $16.34 as of close March 1. That means there is a whopping 44% spread to the APT. (The market already has raised the share price 52% the past two weeks.) The spread to the highest target is 178%.

The Barchart Technical Opinion rating for Voyager is “Strong Buy” with 72% of analysts rating the company a “Buy” and a Strengthening short-term outlook on maintaining the current direction. Longer term, the trend strength is Maximum. Long-term indicators mostly agree with the trend. Included among the caveats is that the market is approaching Overbought territory. Barchart therefore says to be “watchful of a trend reversal.”

I’ve often heard it said that the ideal time to buy a stock is usually when it is trading at a substantial discount to its target price. This discount could be the result of weak market conditions or overreaction to recent company setbacks. On the other hand, the ideal time to sell a stock is usually when it is trading higher than its target price range or during overheated markets.

Although this name is clearly high-risk because of the oceans of uncertainty about its AAV capsid program, the 44% spread to analysts’ APT is stunning. And there appears to be ample operating cash for Voyager to generate definitive clinical results by 2022. And that’s without an additional capital raise, which it could probably accomplish if clinical results prove impressive.

Voyager is a rational Buy, rather than a pure gamble, for portfolios with a high-risk tolerance component. Although investors have already pushed up shares some 52% over the past 2 weeks, it could still be a profitable ride the next couple of years for those with the guts to jump in now. And I mean now.

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