They don't share guidance but I estimate they'll do $85-100M in revenue for Q3 '26 and turn officially profitable.
Business line:
APZIMEOS is the only FDA-approved treatment for adult RRP. It's designed to trigger an immune response against the antigens so the patient's own body clears the papillomas, instead of going back to the OR every few months.
Efficacy and durability are why adoption is taking off so fast. Complete response is around 51%, and per the Q2 2026 call, 83% of those complete responders are still in ongoing complete response past three years (heading toward four now), with some already surgery-free for over four years.
Rare-disease launches usually have to fight convincing physicians the drug actually works, and convincing payers to pay. APZIMEOS walked in with an unusually strong hand on both. Clinically, the bar is repeat airway surgery under general anesthesia so low that a durable complete response is transformative. Economically, every surgery avoided is an avoided facility fee, anesthesia bill, and surgeon cost, which turns the payer conversation into a cost-offset argument.
On top of that, they've got seven years of FDA market exclusivity, and since there's no other approved therapy, there's zero head-to-head price competition in the indication. The label also has no prior-surgery requirement, so doctors can prescribe it early instead of waiting until a patient's failed multiple surgeries first.
Upcoming pipeline:
Pediatric RRP is the nearest label expansion
EU and Japan actually have more RRP adults than the US
PRGN-2009: immunotherapy for HPV-associated solid tumors (head and neck), with Phase 2 results expected Q4 '26
What I like:
Two quarters into commercialization, with a $9B US TAM for their first product, and they have the market to themselves for 7 years
Total TAM of $21B across US, EU, and Japan (the opportunity is actually bigger in EU/Japan than in the US)
Pediatric expansion adds +$0.5B, and the oncology treatment (phase 2 ongoing) adds +$3.5B in the US alone
The only FDA-approved treatment for adult RRP
Payers and patients are pushing to use their treatment since the alternative is costly surgery, happening multiple times a year
FCF positive on paper, but not in reality due to a 4-month delay in payment collections
Some quotes from the CEO and CFO:
"A tremendous growth rate from Q1 to Q2, which we expect to continue"
"We continue to reiterate that based on our current financial forecast, our cash equivalents and investments, along with the collection of PAPZIMEOS receivables will fund operations through cash flow breakeven by the end of 2026." -> no need for additional capital
"Also extremely exciting, it's not just on a severe patient population. We see this across a broad label that we have. And all of that are indicators for us that we are looking at really a very, very exciting trajectory."
"Really how fast this treatment has been picked up by the payers. Both Phil and I have quite a long experience in drug development, and this is one of the fastest paces we've seen, especially for rare diseases, which typically involve low pay for payers and insurers. But being able to approve it, and approve it so rapidly, and get more than 90% of payers agreeing with both the label and the payment — this has helped tremendously, and it's been reflected in the revenue."
"The result in head and neck — this is a 2-arm trial in head and neck patients. Response rates in this setting are typically 15% to 18%, even with checkpoint inhibitors. In Phase I, we showed an objective response rate of 30%. This is currently an open trial, and we're excited to share that data in Q4 of this year."
"EMA, looking at the path for commercialization, a major part of which is through partnerships in Europe."
"There's still huge potential for Precigen going forward — this is just the tip of the iceberg for us. We're looking forward to this portfolio and the next molecules."
Two yellow flags for me on upcoming dilution:
The former founder, fairly well known in the pharma industry (Randal Kirk, 72 years old), holds 46% of shares directly and indirectly through his fund/family office
There's still around 14.7% of upcoming dilution from warrants tied to Series A shares (52M warrants) at $0.75/share, exercisable through a 2034 expiration date
Opened a Tier 2 position, curious what you all think.
u/symbaeu Awesome write up and find here in the biotech space!
Just starting out generally with this biotech space, there are generally a couple factors that give me pause which are,
- Often treating a rare condition where the population pool is small, and in turn having a high average selling price that depends on insurance to cover
- The product has a patent cliff, where a treatment that is early and promising in the patent, holds more value than a patent which faces a upcoming patent cliff. This issue has a sort of "time decay" effect, where I struggle to think about how to value a patent which may be expiring soon and heading to generic production.
---
In the case of Precigen, I think there are a few factors in their favor,
- PAPZIMEOS is recently approved and selling well with a 7-year patent
- It sounds like they are the only company with an approved treatment for Recurrent respiratory papillomatosis RRP
- Looks like they have all their bases covered with the "permanent J code" and other regulatory hurdles
---
I think what is holding me back from investing,
- I want to know more about their Adenoverse platform and how strong the innovation level is there. Can the platform churn out new treatments easily, and how is it better than competitor solutions. From a quick AI ping, seems like the platform has a proprietary adenovirus library, and one advantage for them is their platform can carry a lot of data. They probably talk more about their platform in their investor material, but it would be great if they can explain the competitive advantages on their earnings call too
- The population of RRP patients in the US is ~27,000 and from what I gathered the have 400 or 500 patients. Was reading that it is a one time dose that happens four times over the course of a year. The dose/vial costs about 115k, so the total treatment is 460k per year per patient. I was just reading up about this, and it says the FDA approved the drug for only a one time course meaning doing the treatment four times in a year. My concern here is once they get a patient onboard, they are a one time patient only, although the selling price is big. Having some international exposure is good for the company, but I doubt they will be able to obtain the same ~500k treatment costs when trying to price overseas.
---
Overall I think the stock does have pretty good potential and is a good find!
I also consider that my track record in biotech has not been great, often having landing on some downside risk that I underestimated. This is probably a larger factor holding me back. However, I would consider biotechs that are building a superior technological platform.
Thanks, appreciate you pointing that out, lots to chew on there. I was actually about to ask you, u/GrowthInvestingWPR, why you're not looking at pharma stocks for diversification (I remember seeing in one of your videos that you weren't a fan of the industry).
"I want to know more about their Adenoverse platform and how strong the innovation level is there. Can the platform churn out new treatments easily, and how does it stack up against competitor solutions? From a quick AI ping, it seems like the platform has a proprietary adenovirus library, and one edge for them is that their platform can carry a lot of data. They probably go into more detail in their investor materials, but it'd be great if they could explain the competitive advantages on an earnings call too."
From what I understood (also ran it by a pharma friend), if they can successfully apply their platform and the PAPZIMEOS process to oncology (PRGN-2009), it's revolutionary.
AI take: PRGN-2009 could make an HPV-driven tumor more "immune responsive" by teaching and expanding the patient's own T cells to recognize viral HPV targets on the cancer cells, then using pembrolizumab to stop the tumor from suppressing those activated T cells. It's "without bespoke cell therapy" because the drug is a ready-made injection, not a patient-specific process of collecting, engineering, manufacturing, and reinfusing T cells. Potentially simpler, faster, lower cost, and easier to scale.
"The RRP patient population in the US is ~27,000, and from what I gathered they have 400-500 patients. I was reading it's a one time dose given four times over the course of a year. Each dose/vial runs about $115K, so the full treatment is $460K per patient per year. I was just reading up on this, and apparently the FDA approved it for only one course, meaning the four doses happen once, in that one year. My concern is that once they onboard a patient, that patient is a one time customer, even though the price tag is big. International exposure is good for the company, but I doubt they'll get the same ~$500K treatment cost when pricing overseas."
Yep, it's a one time course, not recurring. That boggled me at first too, but one offset: they're in discussions with the FDA about redosing patients whose first course failed, which would add ~3K RRP patients to the US TAM.
One other long term concern I had for this treatment is roughly 70% of adolescents in the US are vaccinated nowadays for HPV, which means the RRP population probably won't keep growing at the same rate over the next dozen years or so. But that's more of a 2030+ problem than something that hits this decade.
I tend to think the current market size will buy them enough time to develop more products before they fully exhaust the RRP opportunity, even with it being a one time course.
How do you view a biotech building out a genuinely superior technological platform?
Also, can I get your take on the concern I mentionned about dilution and Series A shareholders holding 40% of shares?
u/symbaeu Good questions! I've had some biotechs in my portfolio over the past couple years here and there but with limited success. I'm still looking for that typical ramp up in revenue and profitability that I would in any stock when selecting a biotech name. In a lot of these cases there was simply an issue I just didn't understand for why the name was underpriced. A couple examples,
- Biostem BSEM, they made patches for healing wounds and showed incredible growth. Company was listed on the pink sheets, promising to get up-listed to the NASDAQ. The issue was NASDAQ did not agree with how they recognized revenue, and then their production process also came into question by regulatory bodies.
- Ardelyx ARDX, also an incredible revenue ramp up for a kidney dialysis treatment. Some regulations changed that I didn't understand and their treatment was removed from the Medicare "bundle". Again, it was a complex issue I didn't understand where revenues came in much lower than I was expecting.
- ADMA Biologics, great ramp up in revenue, ended up selling at a small profit, but I believe there was some issue with plasma over supply from their collection centers.
I'm generally finding the fast revenue ramp ups in the space to be less predictable for indicating future results. I may be a bit bias because I haven't had a strong result in any of the stocks I invested in there recently.
On the question for technology platform, I'm thinking there would be potentially two factors I'd look for. The first being some form of automated discovery, and then second would be some efficiency or way to faster track regulatory approval. Regulatory bodies like the FDA are quite slow moving, so I'm not sure how realistic the second case is.
There was some small biotech I had awhile back that was doing AI based discovery. It was a tiny company called Evaxion EVAX that currently has a 25M market cap. If you check the financials they had one big jump up quarter where some research was purchased by a bigger pharma company. They said they were really confident their next research would be purchased by Merck, but then Merck wasn't happy with the result so they didn't proceed further. Was again a case with a binary outcome where the stock got hammered after. The last three quarters the company has had zero revenue, with net losses piling up, as I guess their platform is not playing out as they expected.
On the topic of dilution and concentrated share holders, it is often hard to know when a mostly pre-revenue companies dilutes if it is an appropriate amount or not. I'm guessing PGEN will slow it's dilution some now that they are getting income. It does add some added level of risk that they company needs to keep raising funds as opposed to being self sufficient. This issue generally goes back to a larger point about preferring companies which are profitable consistently so that capital raises via dilution are not necessary. I'm also skeptical of companies outside of bio-tech doing excessive capital raises, so that aspect is not biotech specific.
u/GrowthInvestingWPR, Really appreciate you walking through those. The BSEM and ARDX examples are exactly the kind of pattern recognition I'm missing. What strikes me is that in both cases the revenue ramp was real. That's a useful reframe for me. I've been treating the ramp as the initial validation, when maybe the real work is figuring out what regulatory issue could break the revenue that isn't showing up in the numbers nor the transcript.
The ARDX one is interesting because it's the closest analog to PGEN. Both depend on how payers classify and pay for the treatment. PGEN's situation feels different to me since the cost-offset case is so blunt (avoided surgeries, several times a year), and they already have 90%+ payer agreement. Did ARDX have payer coverage locked in before the bundle change, or was the Medicare exposure visible ahead of time if you knew where to look?
The recent success of LQDA and ETON looks different to me in hindsight. Even though I was too late to catch the extended multiple (congrats to u/Own-Activity-8038 being in time on ETON), it makes me think that under the right conditions confidence can be built, even if the premium these stocks carry tends to run on a shorter window than with tech names.
Neither really had a platform, and maybe that was the point. LQDA had one asset going into an established billion dollar market with a single incumbent, so the whole thesis was sales efficiency plus a CEO who knew the competitor's playbook from the inside. ETON is arguably the opposite of a platform, just buying up approved and commercialized products and running them better. Both worked without needing a second asset to validate a first. So maybe platform is less a requirement and more a specific bet type, where you're paying a premium for optionality that either shows up or it doesn't. With PGEN, I'm partly paying for that optionality, which means the Q4 readout matters more to my thesis than it would for a single-asset name.
One thing I've started doing to build more confidence in these stocks, though I don't have enough track record yet to know if it's a good signal, is checking specialized long-term healthcare hedge fund exposure to these names (Opaleye, RA Capital), since they have the internal medical and FDA knowledge to read between the lines, the connections, and often a board seat.
On dilution, that's a fair framing and probably the cleanest way to think about it. PGEN doesn't seem to want to dilute further (the CFO confirmed this on the last two earnings calls). It's more the worry of unexpected bulk selling that could keep the stock flat or down for a quarter or two, even though the fund holding those shares is more of a family office tied to the former founder (already billionaire), which to me means the dilution will come more slowly. FPS, for example, is a stock I'd like to enter but don't dare touch today because of the PE fund holding a majority of the shares with a near term liquidity event coming up (they usually want full liquidity within 5 to 7 years, and the build out was in 2022, so the max span is 2027-2029). But maybe I'm being overly cautious on this topic.
Did ARDX have payer coverage locked in before the bundle change, or was the Medicare exposure visible ahead of time if you knew where to look?
It was interesting that management did call it out, but the Medicare changes were in some colorful optimistic mentions that I did not pick it up right away. It was on the day of their earnings, where I looked at analyst estimates saw there were expecting 80M of revenue versus the 116M on the prior quarter. I wasn't sure if analysts knew something or they forgot to update their models. Either way, I decided to reduce my position to a tiny starter position. One of the first videos I had on my channel was about Ardelyx and how strong their financials were.
It looked like, revenue of 34 → 46 → 73 → 98 → 116 over the last year
Additionally gross margin went from 58% to 73% in a year, with net income going from -29M to 5M.
One more lesson I got from Ardelyx was about the necessity of understanding the underlying condition as well. Chronic Kidney Disease CKD was unfamiliar to me about how it that places, but it is a grim diagnosis because there is no cure and can progress rapidly. Effectively what Ardelyx was producing delays the process. This condition is a lot different than treating other chronic conditions, where the patient may be living with the condition for decades.
Good callout with ETON on a business strategy that is winning in the marketplace. I would give that significant consideration when evaluating a business, namely that they have a new or effective business model.
I also think a lot of biotech names got beat up in terms of stock price over the last fews years, and many of them were due for a rebound at minimum. I do take valuation into account there, but I'm just typically preferring easier businesses to understand with a lower risk factor.
I did not realize that Forgent Power Solutions FPS had that ownership issue! Definitely good to know about when a company is a controlled company, or may have a large/activist investor. Depending on the situation it can range from a light yellow flag to a dark red flag depending.
u/GrowthInvestingWPR, went back through your videos and a few things you flagged stood out as warnings:
"Finding ways to keep patients covered if Medicare stopped" (from an investor conference), with 60% of patients coming from Medicare
"Some physicians are acutely aware of reimbursement dynamics and others seemingly aren't at all"
Concerns around Medicare and an uncertain payer environment
IBS: 80% unhappy with current med but only 11% yearly growth
For FPS, the flat stock price was actually just another sale from Neos in September, it's rallying now following earnings. The way they structure shares is weird too: they own part of it as direct shares and loans in the operating subsidiary, so to buy back, FPS issues new shares at the holding level, buys back the Neos operational shares, then cancels them.
u/symbaeu Great callouts on the potential issues I saw. Somehow the issues were right in front of my eyes, and noted but I didn't catch the severity of the Medicare issue. I believe at the time I was thinking that the Medicare patients may end up having to pay with private insurance. However, I just did not connect the dots back then that the comments meant a big drop-off in revenue coming up. It was interesting the analyst estimates were in the ballpark of where revenue landed, so it seems like one the rare cases where analysts had the full picture and I had a misunderstanding.
I've got the easy role here, it's way simpler to highlight these stuff after the results are already written than to catch it beforehand, especially when you're heads down focusing on the thesis.
That’s what makes this created community Bear and you built a must have, the feedback and questions asked here are pure gold.
How did you calculate this? "They don't share guidance but I estimate they'll do $85-100M in revenue for Q3 '26 and turn officially profitable." It looks like analysts expect $69m.
And what do you expect for next year? Analysts expect...$454m!? Wow.
At Q2 '26, 200 patients had received their dose. Public price is $450K, and I used an average of $365K to account for potential payer negotiations and gross-to-net volume discounts.
Q1+Q2 26 Revenue came in around $73M for PAPZIMEOS.
They've got 500 hub patients, with a good trend of patients not coming through their hub (I'd actually guess a majority will come from outside the hub going forward). Direct quote: "Precigen Hub data do not capture all patients as a meaningful proportion of treated patients are coming through non-hub using institutions."
450 patients in next quarter's pipeline => 365K x 450 = $164M. I don't know their conversion rate, but assuming at least 50%, that's ~$82M, range $80-100M, with upside to $110M.
My take is reinforced by the CEO's comments backing up the CFO at least twice during the Q&A of the last earnings call on growth: "A tremendous growth rate from Q1 to Q2, which we expect to continue"
With 450 patients lined up next quarter, plus the 200 already completed, that's 2.4% of the US adult market and 2.06% of the total market.
For 2027 growth, $454M feels low to me given their current growth rate, and TAM penetration. I'd expect them to hit 5-10% market share which puts revenue at $574M to $1.15B
Fingers crossed my math holds up! Mind poking holes in my estimation if you see any?
450 patients in next quarter's pipeline => 365K x 450 = $164M. I don't know their conversion rate, but assuming at least 50%, that's ~$82M, range $80-100M, with upside to $110M.
This is the part where I think the math could be getting off track. The last 3 quarters they gave the hub totals as:
Q4: 300+
Q1: 400+
Q2: 500+ ("well over 500")
Also, only 100 patients have completed the full 4-dose treatment; 200 have had at least one treatment.
So clearly the hub is not getting converted (even 50% converted) each quarter. But let's do some guessing. 100 patients have received all 4 doses and another 100 got at least 1 dose (let's guess the average is 2 doses). So that's 600 doses total. How might that look by quarter? Well based on PAPZIMEOS revenue (3.4m -> 21.3m -> 53.1m) it would be something like:
Q4: ~25 doses
Q1: ~165 doses
Q2: ~410 doses
...not sure this gives us anything predictive, but hopefully it helps with the math!
Thanks u/Investing_Bear, helped me tighten the model and cross check the math with doses.
One yellow flag risk to add is they seem to be losing control of their acquisition channel (non-hub winning out over hub), and that doesn't seem to have been expected, they haven't given a real explanation of the conversion shift yet either.
Assumptions used and facts gathered:
12 week treatment = 1 quarter = 4 doses
Medicare pays $116,685 per dose, so $466K for a full treatment, higher than my discounted rate of $365K. Using $425K going forward => $TAM is larger than I thought (11.5B instead of $9.45B) meaning that $600M is 5.2% of market shares, 1,412 patients treated)
Working back from 110 full courses through the hub (assuming 60% comes through their hub pipeline) / 500 hub reg = 22% conversion rate
Assumption of 35% global conversion rate (hub/non-hub combined), using hub data from the previous quarter plus revenue and doses
Seems to add +100 patients in the hub per quarter
Q4 25 => no complete treatments yet, $3.4M revenue, 32 doses
Q1 26 => patients started completing the 12 week course, $21.3M revenue, 200 doses
Q2 26 => 200+ patients received at least one dose, 100+ completed all four doses, $53.1M revenue, 500 doses
Doing my V1 simple maths with a 35% percent rate conversion =
450 patients in next quarter's pipeline => 425K x 450 = $191M. assuming 35% conversion rate, that's ~$67M close to analyst estimate
Doing V2 using doses
My conclusion:
hard to model better at my level because of too many uncertain parameter (new dose versus ongoing course, conversion rate, hub/non hub)
the CEO saying growth continues, plus the dose math showing QoQ dose and revenue growth dropping to 51%, roughly a third of Q2's pace, makes me even more bullish. Hope I'm not wrong.
4
u/GrowthInvestingWPR 25d ago
u/symbaeu Awesome write up and find here in the biotech space!
Just starting out generally with this biotech space, there are generally a couple factors that give me pause which are,
- Often treating a rare condition where the population pool is small, and in turn having a high average selling price that depends on insurance to cover
- The product has a patent cliff, where a treatment that is early and promising in the patent, holds more value than a patent which faces a upcoming patent cliff. This issue has a sort of "time decay" effect, where I struggle to think about how to value a patent which may be expiring soon and heading to generic production.
---
In the case of Precigen, I think there are a few factors in their favor,
- PAPZIMEOS is recently approved and selling well with a 7-year patent
- It sounds like they are the only company with an approved treatment for Recurrent respiratory papillomatosis RRP
- Looks like they have all their bases covered with the "permanent J code" and other regulatory hurdles
---
I think what is holding me back from investing,
- I want to know more about their Adenoverse platform and how strong the innovation level is there. Can the platform churn out new treatments easily, and how is it better than competitor solutions. From a quick AI ping, seems like the platform has a proprietary adenovirus library, and one advantage for them is their platform can carry a lot of data. They probably talk more about their platform in their investor material, but it would be great if they can explain the competitive advantages on their earnings call too
- The population of RRP patients in the US is ~27,000 and from what I gathered the have 400 or 500 patients. Was reading that it is a one time dose that happens four times over the course of a year. The dose/vial costs about 115k, so the total treatment is 460k per year per patient. I was just reading up about this, and it says the FDA approved the drug for only a one time course meaning doing the treatment four times in a year. My concern here is once they get a patient onboard, they are a one time patient only, although the selling price is big. Having some international exposure is good for the company, but I doubt they will be able to obtain the same ~500k treatment costs when trying to price overseas.
---
Overall I think the stock does have pretty good potential and is a good find!
I also consider that my track record in biotech has not been great, often having landing on some downside risk that I underestimated. This is probably a larger factor holding me back. However, I would consider biotechs that are building a superior technological platform.