Thursday, February 1, 2018

An Integrated BioSci Alpha Intelligence On Solid Biosciences: Is This The Silver Bullet For Duchenne Muscular Dystrophy?

Summary

  • Asides CAR-T, gene therapy/editing are going to power the next waves of therapeutic innovation.
  • Recently IPOed, Solid Biosciences is trading northbound.
  • Company is innovating a gene therapy to potentially service the orphan disease (Duchenne muscular dystrophy).
  • Robust cash position from the public offering to fund operating expenses.
  • Significant insider purchases signified their confidence in the company’s prospects.


“When we made the mistake of letting the news out of the bag, we are confronted with the latest reasons that mankind is doomed: global warming/cooling, the evil Soviet empire, recession, inflation, illiteracy, the high cost of healthcare, tribal warfare ... Even the sports page can make you sick. Keeping the faith and stock picking are normally not discussed in the same paragraph, but success in the latter depends on the former.” - The Former Fidelity-Magellan Manager (Peter Lynch)

On Jan. 30, 2017, the shares of Solid Biosciences (NASDAQ:SLDB) - an innovator of gene therapy to manage Duchenne muscular dystrophy - catapulted $3.47 higher to trade at $25.97 for +15.9% gains for the trading session. Back on Jan. 25, the former private firm offered shares to the public at $16.00 (as it began to trade on the Nasdaq stock exchange the next day). Despite that the share price moved southbound in the following days, it reversed course to trade much higher.
 
Figure 1: Solid Bioscience stock chart. (Source: StockCharts)

At Integrated BioSci Investing (“IBI”), we have much success in finding alphas. For instance, Nektar Therapeutics (NASDAQ:NKTR) procured +338% for subscribers. All that being said, we’ll elucidate the underlying fundamentals of Solid and to provide further updates on our investing thesis re gene therapy.

About The Company

Based in the innovation hub (Cambridge, MA), Solid Biosciences went public on Jan. 25, 2018, via J.P. Morgan (NYSE:JMP), Goldman Sachs (NYSE:GS), and Leerink Partners which acted as the joint book-running managers for the said transaction. Accordingly, the firm closed its initial offering of 8.98M shares at $16 (and raised $133.7M). This figure took into account the underwriters’ optional purchased of 1.17M additional shares.

As follows, the company now has plenty of cash to fund its highly promising pipeline to potentially service Duchenne muscular dystrophy. Per figure 2, the three developing franchises include corrective (i.e. gene) therapies, disease-modifying molecules, and assisted devices.

Figure 2: Therapeutic pipeline. (Source: Solid Biosciences)

Duchenne Muscular Dystrophy

Caused by various mutations in the dystrophin genes, Duchenne muscular dystrophy (“DMD”) is an X-linked rare genetic condition that occurs exclusively in (one out of 3.5K to 5K) boys. Due to the defective protein (dystrophin), the muscle tissues become wasted (and are replaced by fat and fibrous scars). Ultimately, this leads to the symptoms of muscles dysfunction such as weakness, inability to walk (in their early teens), as well as heart/lungs failure. The mainstay of disease management is with corticosteroids (prednisone or deflazacort) to improve motor and lungs functioning, strength, as well as to reduce scoliosis risk, and possibly to delay the onset of cardiomyopathy. In addition, eteplirsen of Sarepta Therapeutics (NASDAQ:SRPT), was FDA-approved in Sep. 19, 2016 for the management of patients with the confirmed mutation of the dystrophin genes (amenable to exon 51 skipping).

Of note, the prolonged use of glucocorticoid can result in weight gain, bone thinning (osteopenia), abnormal hair growth (hirsutism), and a cushingoid appearance. Even with the approved treatment, patients, nevertheless, suffer from the progressive decline in muscles function that, in and of itself, results in premature death (when the lungs/heart muscles are involved). Hence, there is a strong demand for better management options.

SGT-001 And Gene Therapy

The novel lead molecule, SGT-001 is a gene therapy that employed the adeno-associated virus (“AAV”) - to transfer the correct dystrophin genes dubbed microdystrophin (to patients suffering from DMD). Notably, preclinical data suggested that it has the potential to slow or stop the disease progression regardless of stage or genetic mutation. Pioneered by the ingenious Drs. Dongsheng Duan and Jeffery Chamberlain, SGT-001 earned the rare pediatric disease designation in both the US and the EMA. And, it is currently being investigated in phase 1/2 clinical trial.

In the prior research, we noted that the FDA approved the gene therapy of Spark Therapeutics (NASDAQ:ONCE) on Dec. 19, 2017. Using the similar AAV vector (as SGT-001’s), Spark’s voretigene neparvovec-rzyl (Luxturna) was approved as the one-time management for patients afflicted with biallelic RPE65 mutation-associated retinal dystrophy. The aforesaid approval lowered the regulatory hurdles for potentially disruptive innovations (gene therapy/editing, and CAR-T). Gene therapy is now an accepted treatment rather than science fiction of the past decades. Notably, most prior works on gene therapy did not bear fruits, as the field was in its infancy. In an article published by John Carroll in ScienceMag,
“Eighteen years ago, the gene therapy field was nearly shoved into oblivion after the death of a patient in a trial being conducted by Penn’s James Wilson. But over the past 10 years investigators, using some of the same technology that Wilson helped create, have mounted a massive comeback effort. In Spark’s case, the Children’s Hospital of Philadelphia played a key role in pushing the early R&D work, giving the biotech a big leg up in the race to get the first such gene therapy into the U.S. market.”

Final Remarks

Of note, this is the preview of the Integrated BioSci Alpha Intelligence research, published in advance to subscribers of Integrated BioSci Investing (a community of expert physicians, scientists, executives, market leaders, and everyday investors). In the aforesaid article, we took the deep-dive into the data analysis (and elucidate the potential upsides) that you can expect from this firm. If you're an investor (or thinking about investing in Solid Biosciences), it's a good idea to check out the pending catalysts of this firm.


Author’s Notes: We’re honored that you took the time out of your busy day to read our market intelligence. Founded by Dr. Hung Tran, MD, MS, CNPR, (in collaborations with Dr. Tran BioSci analyst, Ngoc Vu, and other PhDs), Integrated BioSci Investing (“IBI”) marketplace research is delivering stellar returns since inceptions. To name a few, Nektar Therapeutics (NASDAQ:NKTR) procured more than 337% profits; Spectrum Pharmaceuticals (NASDAQ:SPPI) delivered over 192% gains; Kite Pharma netted 82%; Atara Biotherapeutics (NASDAQ:ATRA) appreciated +166%. Crispr Therapeutics (NASDAQ:CRSP) garned plus 127%.  Exelixis Inc (NASDAQ:EXEL) earned greater than 63% capital appreciation. Our secret sauce is extreme due diligence coupled with expert data analysis. The service features a once-weekly exclusive in-depth Integrated BioSci Alpha-Intelligence article (in the form of research, reports, or interviews), daily individual stocks consulting, and model portfolios.
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