Dive Brief:

• Regenxbio lost almost a fifth of its value Wednesday after the Food and Drug Administration placed a clinical hold on two of the company’s experimental gene therapies.
• Regulators acted after researchers found a case of brain cancer in a 5-year-old child who had received one of the treatments, RGX-111, four years earlier. The agency decided to extend the hold to the second therapy, RGX-121, because of similarities between the two and “shared risk between the clinical studies,” Regenxbio said Wednesday.
• The company said there has been no causal link between RGX-111 and the child’s condition and emphasized that RGX-121 is a separate therapy with years of safety data. "We are surprised by FDA's decision to place our RGX-121 program on hold while the investigation of this single, inconclusive incident in RGX-111 continues," CEO Curran Simpson said in the statement.

Dive Insight:

The news is “confusing and unexpected,” Leerink Partners analyst Mani Foroohar wrote in a note to clients. The hold comes just days before the Feb. 8 deadline for the FDA to approve or reject RGX-121 for treatment of Hunter syndrome, a rare degenerative condition that causes cell, tissue and organ dysfunction and extends to the central nervous system.

Foroohar in September told clients an approval was “highly likely,” even after the FDA delayed the decision by three months to evaluate longer-term data submitted by the company. Indeed, the outlook for both RGX-121 and RGX-111 looked promising; in January 2025, Nippon Shinyaku agreed to pay $110 million up front with the possibility of as much as $700 million more for rights to the two therapies.

RGX-111, which is designed to treat a condition known as Hurler syndrome, is earlier in development. The child identified with cancer was participating in an early-stage study and had no symptoms; the tumor was identified during a routine brain MRI, Regenxbio said. No similar issues have been seen with the nine other patients treated with RGX-111 or the 32 who received RGX-121, the company said.

Still, while a causal link hasn’t been established, the setback further illuminates the possible risks in developing gene therapies, which hold great promise for patients with incurable and rare diseases but may also pose as-yet unknown dangers. Capsida Biotherapeutics, Astellas Pharma and Sarepta Therapeutics have all reported deaths of patients who received their gene therapies either in clinical trials or on the market.

The FDA has struggled find a balance between the potential safety concerns and the need for innovative therapies. And under top regulator Vinay Prasad, surprise rejections and delays have plagued the industry. The latest news from Regenxbio “feeds directly into the `FDA unpredictability’ element of the bear thesis across gene therapy,” Foroohar said.

Regenxbio said it has yet to receive the full clinical hold letter from the FDA and “awaits additional details” from the agency. Foroohar said he believes the stock drop is overdone, considering the other therapies in the company’s pipeline, including a Duchenne muscular dystrophy treatment that will yield pivotal trial results in coming months.