SVB Leerink cuts Solid Biosciences to MP; PT to $8 from $50

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SVB Leerink downgraded Solid Biosciences (NASDAQ:SLDB) to “market perform” from “outperform” and slashed its price target to $8 from $50 after the company reported disappointing Phase 1/2 data from its experimental gene therapy, SGT-001, treating patients with Duchenne muscular dystrophy (DMD).

Shares of Solid Biosciences plunged $15.15, or 68%, to $7.19 in heavy turnover on Feb. 7.

DMD is a genetic disorder that causes progressive muscle weakness because of an absence of dystrophin, a protein that helps keep muscle cells intact. Historically, the large size of the dystrophin gene has limited the success of gene therapies, so Solid created a truncated version of the gene, known as microdystrophin. But after three months of treatment, three patients showed low levels of microdystrophin expression.

“Our thesis that investors should focus not only on the quantity of microdystrophin expression but also on the quality of the expressed protein appears to be at significant risk based on the increasingly uncertain ability of SGT-001 to be safely dose-escalated to a level which is sufficient to achieve competitive microdystrophin levels,” writes analyst Joseph Schwartz.

“We believe it is prudent to wait and see if Solid can achieve adequate levels of expression in a safe manner before considering whether the microdystrophin protein that is expressed by SGT-001 is differentiated,” from two other competitors, Mr. Schwartz added.

Abby Hardy