RGNX Stock Slumps 15% After-Hours — What’s Driving The Selloff?

• The company has not detailed exactly how the new money will be spent. 
• REGENXBIO focuses on developing one-time gene therapies aimed at treating rare genetic diseases and serious eye conditions at their root cause.
• Earlier this year, the company reported that its cash and investments were enough to support operations into early 2027.

Shares of REGENXBIO Inc. (RGNX) tumbled 15% after-hours on Thursday after the company announced plans to raise $100 million through a public stock offering, raising concerns of dilution.

The company plans to sell $100 million worth of its common stock in an underwritten public offering, with the possibility of selling up to 15% more shares if the underwriters exercise their option. Leading banks, including Morgan Stanley, J.P. Morgan, Leerink Partners, and Mizuho, are handling the deal. No final price or number of shares has been set yet.

The company has not detailed exactly how the new money will be spent, but biotech firms typically use such proceeds to support ongoing research, clinical trials, manufacturing, and day-to-day operations. Earlier this year, the company reported that its cash and investments were enough to support operations into early 2027.

Why Investors Are Watching

REGENXBIO focuses on developing one-time gene therapies aimed at treating rare genetic diseases and serious eye conditions at their root cause. Its main programs target Duchenne muscular dystrophy, a progressive muscle-wasting disorder that mainly affects young boys, where recent late-stage study results have been encouraging.

The company is also working on a treatment for Hunter syndrome, a rare inherited condition that can severely affect children’s development and health, and it plans to resubmit its application seeking approval from the FDA after a rejection in February.

Through a partnership with AbbVie, REGENXBIO has two programs in large late-stage studies for eye diseases that can cause vision loss, specifically wet age-related macular degeneration and diabetic retinopathy. In addition, the company earns royalties from a gene therapy product that Novartis has already brought to market for spinal muscular atrophy.

RGNX’s Near-Term Catalysts

Investors are now awaiting further advancement of the Duchenne muscular dystrophy program after its positive late-stage data, a potential resubmission and continued review of the Hunter syndrome treatment, and major clinical data readouts in the fourth quarter for the two eye disease programs partnered with AbbVie.

How Did RGNX Retail Traders React?

On Stocktwits, retail sentiment around RGNX stock stayed within the ‘neutral’ territory over the past 24 hours, while message volume rose from ‘normal’ to ‘high’ levels.

A Stocktwits user termed the selloff an overreaction and urged others to buy more at current prices.

https://www.stocktwits.com/buymoremakemore/message/659293851

Another termed the capital raise as “cautious management” that would allow enough cash to fund the company’s upcoming plans.

A third user opined that the raise means there is no imminent deal announcement, either for the company as a whole or for its gene therapy aimed at treating DMD.

According to data from Koyfin, 10 of the 11 analysts covering RGNX rate it ‘Buy’ or higher, while one rates it ‘Hold.’ The stock has a 12-month average price target of $24.36, implying a potential upside of about 118% from the stock’s last close.

RGNX stock has fallen 22% year-to-date. 

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