FDA grants breakthrough therapy designation to Lexeo’s FA treatment

NEW YORK - Lexeo Therapeutics, Inc. (Nasdaq:LXEO), a $240 million market cap biotech company that has seen its shares surge over 10% in the past week, announced Monday that the U.S. Food and Drug Administration has granted Breakthrough Therapy designation to LX2006, the company’s investigational treatment for Friedreich ataxia (FA).

The designation was based on interim clinical data from Phase I/II trials showing clinically significant improvements in cardiac biomarkers and functional measures. The FDA also selected LX2006 for its Chemistry, Manufacturing, and Controls Development and Readiness Pilot (CDRP) program, which aims to expedite development timelines. According to InvestingPro data, analysts maintain a strong buy consensus on LXEO, with price targets ranging from $10 to $28.

"We are highly encouraged by the impact of LX2006 on key measures of cardiac health, especially given the lack of treatments for FA cardiomyopathy today, which is the leading cause of death in FA," said Dr. Sandi See Tai, Chief Development Officer of Lexeo Therapeutics.

According to the company, treatment with LX2006 demonstrated improvements in cardiac and neurologic functional measures, with increased frataxin expression observed in all participants with cardiac biopsies at three months post treatment. To date, 17 participants have been treated across two clinical trials.

Lexeo is currently enrolling patients in a natural history study called CLARITY-FA, which will serve as a control arm for the registrational study expected to begin by early 2026.

Breakthrough Therapy designation is intended to accelerate development and review of therapies targeting serious diseases where preliminary evidence indicates substantial improvement over existing treatments. LX2006 previously received Regenerative Medicine Advanced Therapy designation, Orphan Drug designation, and Fast Track designation from the FDA.

The information is based on a press release statement from Lexeo Therapeutics. InvestingPro analysis shows the company maintains a healthy balance sheet with more cash than debt, though it’s currently in its growth phase with significant R&D investments. For deeper insights into LXEO’s financial health and 10+ additional ProTips, consider subscribing to InvestingPro.

In other recent news, Lexeo Therapeutics has successfully secured approximately $80 million through a private placement, with the transaction expected to close soon. This financial move is led by Frazier Life Sciences and Janus Henderson Investors, and it includes the sale of over 20 million shares of common stock and pre-funded warrants. The funds are set to support the development of Lexeo’s clinical programs, notably LX2006 for Friedreich ataxia cardiomyopathy. Additionally, Leerink Partners has adjusted its price target for Lexeo shares to $10, down from $16, while maintaining an Outperform rating, reflecting the recent financial developments.

H.C. Wainwright also revised its price target for Lexeo, lowering it to $15 from $23, but maintained a Buy rating. This adjustment follows presentations at the American Society for Cell and Gene Therapy conference, where Lexeo’s LX2020 showed promising early data compared to competitors. Meanwhile, Lexeo stockholders have elected two Class II directors and ratified KPMG LLP as the company’s independent auditor for the fiscal year ending December 2025. These updates highlight Lexeo’s ongoing efforts to advance its pipeline and strengthen its financial position.

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