Precigen Inc. (NASDAQ: PGEN) saw its stock climb 14.1% in early trading Thursday, following a first-quarter earnings report that exceeded analyst expectations. The company reported total revenue of $23.25 million, surpassing the consensus estimate of $20.81 million, driven by the first full commercial quarter of its gene therapy Papzimeos (zopapogene imadenovec-drba).
Net product revenue from Papzimeos reached $21.6 million for the quarter, underscoring strong initial uptake for the therapy approved for recurrent respiratory papillomatosis (RRP), a rare disease characterized by benign tumors in the respiratory tract. Total revenue surged to $23.3 million, compared to just $1.3 million in the same period last year. The net loss narrowed significantly to $7.9 million, or $0.02 per share, from $54.2 million, or $0.09 per share, a year earlier. Analysts had anticipated a loss of $0.03 per share.
Chief Executive Helen Sabzevari described the Papzimeos launch as "thrilling," citing robust revenue momentum, while CFO Harry Thomasian Jr. highlighted "continued strength in revenue growth" for the therapy in the second quarter. The company ended March with $56.7 million in cash, cash equivalents, and investments. Management projects that existing funds, combined with anticipated Papzimeos inflows, will sustain operations through cash-flow break-even by the end of 2026.
Papzimeos is the first FDA-approved therapy for RRP, a condition affecting approximately 27,000 adults in the U.S. Historically, repeated surgery has been the standard of care, but clinical trial data showed that 51.4% of treated patients avoided surgery over a one-year period. Unlike typical drug launches, Precigen is not competing against an established medication but rather aiming to displace surgery as the primary treatment approach.
Access and reimbursement are key priorities. Precigen reported that Papzimeos is covered for roughly 297 million people in the U.S., representing over 90% of the insured population. The drug received a permanent J-code (J3404) effective April 1, enabling streamlined billing for both commercial and government payers. This code is expected to facilitate broader adoption among physicians and outpatient providers.
Analysts responded positively to the results. H.C. Wainwright raised its price target on Precigen to $11 from $10, increasing its 2026 Papzimeos sales estimate to $130 million from $113 million. Analyst Swayampakula Ramakanth noted the strong quarter. Citizens also boosted its target to $11 from $9, maintaining a Market Outperform rating, and highlighted that Papzimeos sales exceeded its $19 million estimate.
Despite the early success, the launch remains in its infancy. Precigen emphasized that converting patient-hub signups into actual treated patients is the current focus, with the break-even goal tied directly to ongoing Papzimeos revenue. Any delays in site activation, reimbursement processing, or patient conversion could pressure the cash-flow timeline.
Looking ahead, the company is set to present new durability-of-response data for Papzimeos at the American Society of Clinical Oncology (ASCO) meeting in Chicago from May 29 to June 2. Expansion into additional geographic markets and pediatric indications remains on the horizon, though these are not yet contributing to revenue.
Precigen's transition from a development-stage biotech to a commercial-stage company is now underway, with Papzimeos serving as the cornerstone. The ability to sustain revenue growth and achieve cash-flow break-even will be closely watched by investors as the company navigates this pivotal phase.