REGENXBIO Inc. (NASDAQ:RGNX) experienced a notable decrease in its stock price during the early Tuesday premarket trading session. This downward movement reflects investor reaction to regulatory complications encountered by the biotechnology firm related to its gene therapy RGX-121, intended for the treatment of Mucopolysaccharidosis II (MPS II), also known as Hunter syndrome. MPS II is an ultra-rare neurodegenerative disorder affecting a small patient population.
Earlier this year, the U.S. Food and Drug Administration (FDA) had accepted REGENXBIO's Biologics License Application (BLA) for RGX-121 under the accelerated approval pathway in May 2025. However, the timeline for the Prescription Drug User Fee Act (PDUFA) goal date, originally set for November 9, 2025, was extended to February 8, 2026, signaling a lengthier review process.
The critical development influencing investor sentiment came with the FDA issuing a Complete Response Letter (CRL) concerning RGX-121's BLA. The letter outlined specific concerns, focusing on the criteria used for patient selection in clinical studies and questioning the validity of surrogate endpoints employed to predict clinical benefit. Surrogate endpoints are substitute markers used in trials to infer real clinical outcomes, and the FDA's scrutiny suggests hesitancy about the robustness of these measures in this case.
In the CRL, the FDA outlined several potential routes REGENXBIO might pursue to address its concerns. These include initiating a new clinical study, expanding enrollment to treat additional patients, performing longer-term follow-up evaluations, and employing an untreated control arm for comparison. Such requirements present significant challenges, particularly given the ultra-rare incidence of MPS II, which limits the available patient population for clinical trials.
REGENXBIO has indicated plans to request a Type A meeting with the FDA to discuss the contents of the CRL comprehensively. The company aims to strengthen its submission by incorporating further evidence developed with input from global clinical experts, specifically to clarify aspects concerning the neuronopathic segment of the MPS II patient community. This strategic approach intends to address regulatory concerns and advance the approval process.
The data supporting the initial BLA for RGX-121 derived from the CAMPSIITE I/II/III clinical trial program, which reported positive results including biomarker improvements, functional outcomes, and safety data monitored up to 12 months post-treatment. Across all phases of this trial, RGX-121 was generally well tolerated by the patients who received the dosing regimen.
Industry analysts, such as those from William Blair, emphasize that the primary obstacles raised by the FDA are structural in nature rather than stemming from safety issues related to the clinical hold imposed earlier. Analyst Myles R. Minter highlighted the FDA's cautious approach to granting accelerated approval in the absence of placebo-controlled trials, noting nuanced complexities in clinical trial designs that may contribute to regulatory hesitancy.
Of note, the FDA had previously placed clinical holds on REGENXBIO's gene therapy programs for RGX-111 and RGX-121 in January, following the detection of a neoplasm in a participant treated with RGX-111. This development intensified safety scrutiny for both therapies and underscored the regulatory challenges facing the company.
Investors should also consider that the FDA is concurrently reviewing Denali Therapeutics Inc.'s (NASDAQ:DNLI) application for accelerated approval of tividenofusp alfa, another candidate targeting MPS II, with an extended review timeline signaling the complexity of regulatory evaluations for treatments addressing this rare disorder.
Despite these challenges, REGENXBIO retains a consensus Buy rating among analysts, with an average price target of $31.38. Recent analyst actions include Chardan Capital maintaining a Buy rating with a $52 target as of January 29, Stifel raising its price target to $45 on December 19, 2025, and Leerink Partners upgrading its outlook to Outperform with a $20 target on December 15, 2025. These rating affirmations reflect optimistic long-term views notwithstanding short-term regulatory setbacks.
Benzinga's Edge scorecard rates REGENXBIO highly on momentum, with a score of 82.9, indicating the stock outperforms the broader market sector despite current headwinds. Nonetheless, the stock price experienced a sharp decline of 10.99%, falling to $9.17 in premarket trading on the day of the announcement.
In summary, while regulatory developments present notable challenges for REGENXBIO and its gene therapy candidate RGX-121, the company remains engaged in strategic discussions with the FDA to address concerns and continue development. Investors remain watchful on how these regulatory processes will unfold given the complexities of clinical trials in ultra-rare diseases and evolving safety profiles.