What happened

Shares of Solid Biosciences (NASDAQ:SLDB) fell nearly 41% today after the company announced first-quarter 2019 operating results and provided a business update. The clinical-stage biopharma reported that its lead drug candidate, an experimental gene therapy for Duchenne muscular dystrophy (DMD), started to be administered to a second cohort of patients in its ongoing phase 1/2 clinical trial. A serious adverse event related to the treatment was observed in the first patient dosed. 

While the issues were resolved and reported to the U.S. Food and Drug Administration, Solid Biosciences is just one of several companies and universities developing gene therapies aimed at boosting the expression of microdystrophin in DMD patients. That makes it easy for Wall Street to sell the news, especially in context of the business update from February.

As of 11:52 a.m. EDT, the stock had settled to a 27.8% loss.

A scientist in the lab with a disappointed look on his face.

Image source: Getty Images.

So what

Solid Biosciences reported that the first patient in the new dosing cohort was diagnosed with a gastrointestinal infection, but that was classified as a serious adverse event unrelated to the gene therapy candidate, SGT-001. That same patient also experienced a reduction in platelet count, which was a serious adverse event attributed to the experimental treatment. Additionally, the patient had a spike in transaminases and bilirubin -- biomarkers related to liver function -- that had to be brought back to normal ranges with additional drugs.

The development follows an update from February in which preliminary data showed the starting dose of SGT-001 had little effect on microdystrophin expression. Shares of Solid Biosciences fell more than 73% on that news.

In other words, the lowest dose tested doesn't appear to be effective, while the next-highest dose studied caused safety issues in the first patient receiving it.

Now what

To be blunt, this could prove to be an existential blow to Solid Biosciences. Advances in gene therapy delivery and manufacturing have led to a highly competitive landscape. For instance, Sarepta Therapeutics is racing ahead with its own microdystrophin gene therapy, which has delivered an increase of more than 81% in protein expression and no signs of adverse effects in early studies. While Solid Biosciences exited March with about $95 million in cash on hand, the latest clinical development suggests it may need to go back to the drawing board. 

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