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Precision BioSciences' (DTIL) Stock Up This Week: Here's Why

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Shares of Precision BioSciences, Inc. (DTIL - Free Report) have remained up so far this week as the company has entered into an exclusive worldwide in vivo gene-editing collaboration and license agreement with Swiss pharma giant, Novartis (NVS - Free Report) .

Under the terms of the deal, Precision BioSciences will develop a single ARCUS nuclease designed for safe and efficient in vivo gene insertion in the genome as a potentially curative treatment for certain blood disorders like sickle cell disease and beta thalassemia.

Shares of Precision BioSciences have plunged 79.9% so far this year compared with the industry’s decline of 26.4%.

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Per the above agreement, along with developing an ARCUS nuclease, Precision BioSciences will conduct in vitro characterization while Novartis will be solely responsible for the subsequent research and development, manufacturing, as well as commercialization activities.

Precision BioSciences will be entitled to receive an upfront payment of $75 million from NVS. The company is also eligible to receive up to an additional $1.4 billion as future milestone payments as well as tiered royalties on net sales if a product is commercialized from the above collaboration.

The partnership is looking to leverage Precision BioSciences’ proprietary ARCUS genome-editing platform and gene-insertion capabilities with Novartis’ expertise in drug discovery and gene therapy.

Along with the earnings release of the first quarter of 2022, Precision BioSciences said that its current cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements into mid-2023.

However, upon completion of the latest transaction with Novartis, Precision BioSciences now expects its current cash and cash equivalents to fund its operating expenses and capital expenditure requirements through the second quarter of 2024.

Precision BioSciences currently does not have any approved product in its portfolio. As a result, the company is yet to generate revenues from product sales.

However, the company also generates revenues from collaboration agreements related to some upfront and milestone payments.

DTIL is engaged in developing CAR-T candidates using its proprietary ARCUS genome-editing platform. Using this technology, the company has developed many candidates, out of which three are undergoing clinical development.

Precision BioSciences also has a collaboration agreement with Eli Lilly to discover and develop in vivo gene-editing products using the former’s ARCUS nucleases.

Zacks Rank & Other Stocks to Consider

Precision BioSciences currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the biotech sector are Leap Therapeutics, Inc. (LPTX - Free Report) and Aeglea BioTherapeutics, Inc. (AGLE - Free Report) , both carrying the same Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Leap Therapeutics’ loss per share has narrowed 11.1% for 2022 and 5.9% for 2023 in the past 60 days.

Earnings of Leap Therapeutics have surpassed estimates in three of the trailing four quarters and missed the same on the other occasion. LPTX delivered an earnings surprise of 1.92%, on average.

Aeglea BioTherapeutics’ loss per share estimates narrowed 19.4% for 2022 and 37.5% for 2023 in the past 60 days.

Earnings of Aeglea BioTherapeutics has surpassed estimates in two of the trailing four quarters and missed the same on the other two occasions. AGLE delivered an earnings surprise of 9.47%, on average.