Intellia Stock Price Up 50% – Time to Buy NTLA stock?

The price of Intellia Therapeutics stock jumped more than 50% yesterday at $133.43 per share after the company announced a share offering involving the sale of 72.496 million shares at an offering price of $86.84 per share.

A successful placement of this offering would result in up to $431.9 million in net inflows for the company if underwriters decide to exercise their options in full to purchase shares. The proceeds will be used for advancing the firm’s clinical developments and pipeline of products.

According to the SEC filing, Intellia had a total of $600.8 million in cash, which means that a successful offering would push the company’s total liquidity to more than $1 billion.

For existing investors, this is a dilutive share offering as the resulting price once the proceeds are added to the company’s tangible book value divided by the total number of shares in circulation following the sale of this block results in $74.13 per share, a price that is 14.6% below the offering price.

Meanwhile, comment volume and ticker sentiment jumped yesterday on the popular Reddit messaging board WallStreetBets, although they still account for a fairly small percentage of the total posts.

Could this jump in Intellia Therapeutics stock be the beginning of a new bullish cycle for the share price? Or is this a short-lived jump? The following article takes a closer look at the company’s fundamentals to possibly respond to these and other questions about Intellia.

Intellia Therapeutics stock – technical analysis

The chart above shows that the price of Intellia Therapeutics jumped above a long-dated resistance of $88 per share, possibly as market participants expect that the firm’s TTR treatment could continue to move forward in the process of obtaining approval from regulators.

However, momentum readings seem too elevated at the moment, while the stock closed yesterday’s session 24% above its upper Bollinger band. Based on the current technical setup, chances are that NTLA stock will experience a sharp pullback as market makers will probably seek to fill a portion of the gap left behind by yesterday’s price action.

A total of 21.8 million shares exchanged hands yesterday, a number that is almost 10 times the stock’s average daily trading volume.

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Intellia Therapeutics stock – fundamental analysis

Intellia Therapeutics is a Cambridge-based biotech firm that uses a technology known as CRISPR to develop treatments for multiple diseases. The firm was founded in 2014 and it currently employs around 300 people.

According to Intellia’s website, the firm’s pipeline of treatments includes NTLA-2001, a drug that seeks to treat Transthyretin (ATTR) Amyloidosis – a rare genetic illness that causes kidney and heart failure.

Around 50,000 patients around the world suffer from hereditary ATTR while between 200,000 and 500,000 suffer from a wild type of ATTR. The treatment knocks out the key protein that causes the disease – the TTR protein – and aims to become the leading drug for curing this rare disease.

Intellia still doesn’t have products that generate revenue for the business. The money that the company has produced so far has come from licensing of its technology and collaborations with large firms such as Regeneron and Novartis.

Last year, the firm spent a total of $134 million in research and development and administrative expenses. Meanwhile, losses have surged almost 58% since 2018. In terms of solvency, the firm had only $51.4 million in long-term debt while cash reserves at the moment stand at $600.8 million.

This gives Intellia enough resources to keep funding its research while preliminary results for its flagship NTLA-2001 drug appear to be promising. In a press release published on 26 June, the firm informed that TTR levels were reduced by 96% among patients who received a 0.3mg/kg dose of the company’s treatment – an encouraging number when compared to the typical reduction of 80% resulting from chronic treatments.

The drug is currently undergoing Phase 1 clinical trials involving a cohort of six patients. These preliminary findings, although promising, do not provide any assurance that the drug will keep moving forward in the pipeline while it could be years until Intellia gets the nod from the US Food and Drug Administration (FDA) to market the product.

Approved treatments prescribed for TTR amyloidosis include Vyndaquel/Vyndamax (tafamidis) – a drug developed by Pfizer (PFE) that costs around $225,000 per year. Last year, this treatment generated $1.3 billion for the pharmaceutical company.

At the moment, at a market capitalization of $9.09 billion, Intellia is being valued at 9 times the outstanding cash the firm would have if the share offering is successfully completed. However, this cash is expected to be used to keep funding the firm’s R&D efforts.

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