Intellia Therapeutics Inc

Intellia Therapeutics Inc. (NASDAQ: NTLA) is a genome editing business in clinical trials. The company is focusing on exploiting Clustered, Regularly Interspaced Short Palindromic Repeats/CRISPR associated 9 (CRISPR/Cas9) technology to produce curative treatments. CRISPR/Cas9 is a genome-editing method that involves changing specific sequences of genomic deoxyribonucleic acid (DNA). Its modular architecture is being utilized to develop in vivo and ex vivo therapeutics for illnesses with a high unmet need.

Key Highlights

• On March 9, 2022, Intellia Therapeutics, Inc. reported that the US Food and Drug Administration (FDA) has given orphan drug status to NTLA-5001, Intellia's ex vivo experimental TCR-T cell therapy for the treatment of acute myeloid leukemia (AML).  Acute myeloid leukemia (AML) is a blood and bone marrow malignancy that is lethal if not treated right away. With more than 20,000 new cases expected in 2021, it is the most prevalent kind of acute leukemia in adults in the United States.
• Rewrite Therapeutics, Inc. (Rewrite), a private biotechnology firm focusing on developing revolutionary DNA writing technologies, was acquired by Intellia in February. Targeted repairs, insertions, deletions, and the whole range of single-nucleotide modifications may be possible with Rewrite's DNA writing technique.
• On May 5, 2022, Intellia Therapeutics released its First Quarter 2022 Financial Results and Highlighted Recent Company Progress.
• In the first quarter of 2022, collaboration revenue climbed by around USD 4.8 million to USD 11.3 million, up from USD 6.4 million in the first quarter of 2021. The joint venture with AvenCell was the primary driver of the rise.
• The Company's net loss in the first quarter of 2022 was USD 146.9 million, compared to USD 46.2 million in the first quarter of 2021.
• During the first quarter of 2022, research and development costs climbed by USD 93.8 million to USD 133.1 million, up from USD 39.3 million in the first quarter of 2021. Most of the increase was due to USD 56.0 million in acquisition-related expenditures, which comprised a USD 45.0 million upfront payment and USD 10.5 million for a prospective stock-based earnout payment. The remaining USD 37.8 million was spent on the company's leadership initiatives, research personnel expansion to support these products, and development organization expansion.
• As of March 31, 2022, cash, cash equivalents, and marketable securities were USD 994.7 million, compared to USD 1.1 billion as of December 31, 2021. The decline was caused by USD 95.7 million in cash utilized to support operations, as well as the acquisition of Rewrite for USD 45.0 million.
• In the last 6 months, the price of NTLA stock has corrected by 67.49%, leaning toward the lower end of the 52-week range of USD 38.85 to USD 202.73. Price is below both short-term (50-day) SMA and long-term (200-day) SMA and has taken constant rejection from the short-term (50-day) SMA as can be seen from the price chart.

1-year technical Price Chart (as of 12 May 2022). Source: REFINITIV, Analysis by Kalkine Group

Stock Recommendation

NTLA stock price has been in a correction phase since September from a price level of USD 180.60 and has since corrected by 76.40%, continuously taking rejections from short-term SMA. Only after the price breaks the 50-SMA level of USD 60.85, a strong bullish momentum can be expected.

Given the stock's considerable bearish price movement over the past six months, financial results, and technical analysis, we propose a "Watch" rating on the stock at its closing price of USD 42.60 as of 12 May 2022,

Technical Analysis Summary

* Closing market price as of May 12, 2022.

Investors 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.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

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

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.