Homology Medicine Inc

Homology Medicines, Inc. (NASDAQ: FIXX) is a clinical-stage genetic medicines company focused on providing treatment for rare genetic diseases. The Company’s clinical programs include HMI-103, an investigational gene editing candidate in clinical development for the treatment of patients with phenylketonuria (PKU); HMI-203, an investigational gene therapy candidate in clinical development for the treatment of patients with mucopolysaccharidosis type II (MPS II), or Hunter syndrome; and HMI-102, an investigational gene therapy candidate in clinical development for the treatment of adult patients with PKU.

Recent Financial and Business Updates:

• FIXX Second Quarter 2023 and Recent Achievements Summary:
  • In the second quarter of 2023, FIXX shared promising initial clinical findings from the first group of patients in the pheEDIT clinical trial, evaluating the gene editing candidate HMI-103 for phenylketonuria (PKU). Moreover, FIXX is pleased to announce that the independent Data Monitoring Committee has granted approval for the trial to progress to the next dose cohort. Up to July 26, 2023, HMI-103 demonstrated good tolerability among all three participants.
  • Specifically, Participant 1 experienced a significant reduction in plasma phenylalanine (Phe) levels, falling below the PKU treatment guideline threshold set by the American College of Medical Genetics and Genomics (ACMG) at <360 μmol/L*. Most notably, Phe levels remained below 360 μmol/L for 31 weeks following the dose, even after initiating dietary protein supplementation. Participant 2 also exhibited a substantial 49% reduction in plasma Phe levels at 17 weeks post-dose. Participant 3 received recent dosing, and further data is required for a conclusive assessment.
  • Additionally, FIXX previously communicated that Homology is exploring strategic options for the company and its genetic medicine programs, including HMI-103. However, despite the promising HMI-103 data, due to the prevailing financing environment and the expected clinical development timeline, FIXX has decided not to advance its programs further and has consequently implemented a reduction in force. TD Cowen has been enlisted as FIXX's strategic financial advisor.

• FIXX Second Quarter 2023 Financial Results:
  • As of June 30, 2023, Homology had approximately USD 127.1 million in cash, cash equivalents, and short-term investments. Based on FIXX's current projections, which encompass discontinuing further development of all programs, conducting a comprehensive review of strategic alternatives, and reducing the company's workforce by approximately 80 employees, FIXX believes that its cash resources will sustain its operations until 2026.
  • In terms of financial performance, FIXX's net loss for the quarter ending June 30, 2023, amounted to USD (35.0) million or USD (0.61) per share, compared to a net loss of USD (29.1) million or USD (0.51) per share for the same period in 2022.
  • Collaboration revenues for the quarter ending June 30, 2023, were USD 0.4 million, down from USD 0.8 million during the same period in 2022. These figures represent revenue recognized under FIXX's Stock Purchase Agreement with Pfizer. It's worth noting that the rights granted to Pfizer for potential collaboration on HMI-102 and HMI-103, along with information sharing rights, expired on May 9, 2023.
  • Total operating expenses for the quarter ending June 30, 2023, stood at USD 31.2 million, compared to USD 29.1 million for the quarter ending June 30, 2022. These expenses included research and development costs as well as general and administrative expenses.
  • Research and development expenses for the quarter ending June 30, 2023, amounted to USD 23.0 million, up from USD 21.1 million in the same period in 2022. This increase was primarily driven by higher direct costs associated with FIXX's pheEDIT clinical trial involving HMI-103 and increased external development expenses for earlier stage programs. Partially offsetting these increases were lower direct research expenses for HMI-102 due to the temporary pause in its clinical trial and reduced employee-related costs resulting from the transfer of employees to OXB Solutions during the establishment of the AAV Innovation and Manufacturing Business in the first quarter of 2022.
  • General and administrative expenses for the quarter ending June 30, 2023, totaled USD 8.2 million, up slightly from USD 8.0 million in the same period in 2022. This increase was driven by higher legal expenses but partially mitigated by reduced consulting and market research costs.
    

Technical Observation (on the daily chart)

The price of FIXX stock has shown a consistent uptrend trend since making 52-week low on June 28, 2023, correcting around 46.30%, but with a decent correction of around 20.60% since making its recent high around USD 1.48. Currently, the stock is currently consolidating in the zone of USD 1.05 to USD 1.25, with a break in any direction with decent volume will decide the short-term trend for the stock price. The RSI (14 period) momentum indicator is at a value of 48.71, with expectations of some consolidation. Moreover, the price is currently positioned between both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term resistance and support levels respectively.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Homology Medicines, Inc. (NASDAQ: FIXX) at the current price of USD 1.16 as of September 13, 2023, at 06:40 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Yellow colour line reflects the 20-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 20-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Green colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 13, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.