REGENXBIO Inc. (NASDAQ:RGNX) is a biotechnology company focused on developing gene therapy products. The company is in the clinical stage, meaning it is heavily investing in research and development to bring its therapies to market. This stage often involves high costs and limited revenue, impacting financial metrics like Return on Invested Capital (ROIC).
REGENXBIO's ROIC is -62.38%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 11.40%. This negative ROIC indicates that the company is not generating enough returns to cover its cost of capital. This is common for companies in the biotechnology sector, especially those still in the clinical stage.
When comparing REGENXBIO to its peers, such as uniQure N.V. (QURE) and Voyager Therapeutics, Inc. (VYGR), it becomes evident that negative ROICs are a trend in this industry. For instance, uniQure has a ROIC of -36.68% against a WACC of 13.49%, while Voyager Therapeutics has a ROIC of -24.01% with a WACC of 8.00%. Both companies, like REGENXBIO, are not covering their cost of capital.
MeiraGTx Holdings plc (MGTX) and Ultragenyx Pharmaceutical Inc. (RARE) also show similar patterns, with ROICs of -78.77% and -45.95%, respectively. Their WACCs are 12.20% and 8.99%, further highlighting the financial challenges faced by clinical-stage biotech companies. These figures underscore the high-risk, high-reward nature of investing in this sector.
Blueprint Medicines Corporation (BPMC) stands out with the least negative ROIC to WACC ratio of -2.27. Despite its ROIC of -17.83% and WACC of 7.84%, it is closer to covering its cost of capital compared to its peers. This suggests that Blueprint Medicines might be more efficient in utilizing its capital, offering a relatively better financial position in the challenging biotech landscape.
