Regenxbio director shows confidence amid FDA clinical hold
Insider exercise of 225,000 options follows 35% premarket plunge after tumor detection in gene therapy trial
Regenxbio Inc. shares fell more than 35% in premarket trading on January 28 after the U.S. Food and Drug Administration placed clinical holds on two of the company's investigational gene therapy programs, RGX-111 and RGX-121. The regulatory action followed the detection of a tumor in a participant in a Phase I/II study for RGX-111, a gene therapy designed to treat Sanfilippo syndrome type A, a rare genetic disorder.
Despite the steep decline, a company director exercised 225,000 stock options at a strike price of $13.09 per share, above the current trading price of $11.60, suggesting insider confidence in the biotechnology company's long-term prospects. The transaction represents a notable expression of conviction from management during a period of heightened investor anxiety.
The stock had already declined approximately 10.7% in the week preceding the FDA announcement, bringing total losses to more than 27% over that period. Technical indicators show the shares are approaching oversold territory, with a relative strength index of 40.36, while still trading above the 200-day moving average of $10.38, which may provide some downside support.
The FDA's decision to also place RGX-121—designed to treat Sanfilippo syndrome type B—on clinical hold surprised company executives given what they described as different safety profiles between the two programs. The regulatory setback has triggered investigations by several investor law firms seeking to determine whether Regenxbio complied with securities laws regarding the timing and completeness of its disclosures about the FDA action.
Notwithstanding these challenges, analysts remain overwhelmingly bullish on the stock. Of 11 covering analysts, 10 rate shares as buy or strong buy, with a consensus price target of $31.09—representing potential upside of approximately 168% from current levels. The optimism stems in part from positive data from other programs in Regenxbio's pipeline, particularly RGX-202, which is being developed to treat Duchenne muscular dystrophy.
Kenneth Mills, the company's chairman and former chief executive, has been an active participant in the stock, with recent insider transactions including purchases of 30,752 shares at $3.76 per share in March 2025 and additional acquisitions at even lower prices in August 2024. Mills stepped down as CEO effective July 1, 2024, but remains on the board as chairman, maintaining a significant ownership stake in the company.
Regenxbio, headquartered in Rockville, Maryland, specializes in gene therapies using its proprietary AAV9 delivery technology, which enables cells to produce therapeutic proteins and antibodies. The company has focused on addressing serious genetic disorders with substantial unmet medical needs. Despite recent setbacks, its market capitalization stands at approximately $679 million, with institutional investors holding roughly 84.5% of outstanding shares.
The clinical holds represent a significant hurdle for Regenxbio, which had been making progress in advancing its pipeline of gene therapy candidates. However, the company's diversified approach—spanning multiple rare diseases—may help mitigate the impact of setbacks in any single program. Investors will be watching closely for updates from management regarding the timeline for resolving the FDA's concerns and potential resumption of clinical trials for the affected programs.
From a technical perspective, the stock's sharp decline has created what some analysts view as an attractive entry point for long-term investors comfortable with the risks inherent in clinical-stage biotechnology companies. The combination of insider buying activity, strong analyst ratings, and an oversold technical condition suggests that the market may have overreacted to the FDA's action, though the path to resolution remains uncertain and likely extended.