What happened
Dyne Therapeutics (DYN 0.77%) saw its shares slump 18.1% on Tuesday. The biotech stock closed on Friday at $9.29 a share, then opened on Tuesday at $7.82, falling to a new 52-week low of $7.61 in the afternoon. The stock is down more than 71% over the past year and is a long way from its 52-week high of $32.32.
The pharmaceutical company is developing a pipeline of therapies to treat serious muscle disorders, including myotonic dystrophy type 1 (DM1), Duchenne muscular dystrophy, and facioscapulohumeral muscular dystrophy (FSHD).
Image source: Getty Images.
So what
The company saw its shares plummet when it announced, just before the market opened, that it had received word from the Food and Drug Administration (FDA) that it was placing a clinical hold on Dyne's investigational new drug application (IND) for DYNE-251 to treat Duchenne muscular dystrophy. The FDA requested additional information, both clinical and non-clinical, regarding the drug, the company said, but did not elaborate why the FDA made the move.
Dyne said it expects to respond to the FDA with data from its studies by the second quarter of this year. If the FDA finds the response satisfactory, Dyne said it would start dosing patients in a phase 1/2 multiple ascending dose clinical trial of the therapy by mid 2022. The move pushes back the trial at least a quarter as it had said when it sent in its IND in December that it hoped to begin the trial in the first quarter of this year.
Dyne, which was founded in 2017 and had its initial public offering last January, has no revenue and as of its third-quarter report, had cash reserves of $407.5 million. As it lost $36.5 million in the quarter, its burn rate before it would require additional funding is within four years.
Now what
The biotech company uses a platform called FORCE that breaks down antibodies into oligonucleotides -- short DNA or RNA molecules -- to deliver a payload to muscle cells where the oligonucleotide is expected to bind with the RNA of a cell that drives the disease's progression and then degrades that RNA. Besides DYNE-251, it is also developing DYNE-101 to counter the genetic defect that causes myotonic dystrophy type 1, a muscle-wasting disease, and DYNE-301 to treat FSHD, which is caused by genetic changes in a chromosome and affects the facial, neck, and upper-arm muscles.
The big drop was a function of a down day in the market with the Nasdaq Composite dropping more than 2% in midday trading, and of course, the concern that comes with the delay in the start of the trial for DYNE-251. It may be an overreaction, however, as the company did not articulate the reason for the hold, or if had anything to do with the therapy's safety. Still, knowing that most biotechs can be risky, this element of the unknown will likely weigh on the stock.
