What happened

Shares of Solid Biosciences Inc. (NASDAQ:SLDB), a start-up biotech developing a gene therapy for the treatment of Duchenne muscular dystrophy, were down 63.2% as of 9:57 EDT on Thursday. The first patient dosed with the company's lead candidate suffered a severe reaction that prompted the Food and Drug Administration to place a hold on all studies with SGT-001 until regulators are convinced that it's safe to continue.

So what 

Convincing the FDA that SGT-001 is safe enough to restart testing is going to be an uphill battle. Just ahead of the company's initial public offering, a prominent researcher left its board because of risks associated with the drug's delivery method, a reengineered adenovirus. He cited a disturbing frequency of toxic reactions among animals given a high dosage, an issue the FDA had already pointed out. 

A man holding the back of his head with both hands as if frustrated while looking at a downward sloping stock chart.

Image source: Getty Images.

Moreover, the FDA had already placed a partial hold on later stages of the three-part ascending dose trial until the company could demonstrate appropriate manufacturing processes to support the high dose group. With a bad reaction from the first human test subject given the lowest planned dosage, Solid Biosciences will most likely need to find a new adenovirus vector.

Now what

Another drug with a similar delivery method has already earned an approval from the FDA and a handful of other biotechs have posted solid data that suggests the method can be safely employed. Unfortunately, Solid Biosciences probably doesn't have a whole lot of time to find a solution. 

The biotech raised $133.7 million from its IPO in January, but it also lost $38.7 million during the first nine months of 2017. Management hasn't scheduled a conference call to discuss today's catastrophe, so we'll probably need to wait until the first earnings call to see how much longer it can keep its doors open before it needs to raise more cash.

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