When it comes to treating Duchenne muscular dystrophy (DMD), big news recently surfaced. DMD is a muscle disease. It usually first shows up in boys aged two to five years. Genetic alterations cause it, and the condition progressively gets worse over time.
[content-module:CompanyOverview|NASDAQ:SLDB]Currently, the only Food and Drug Administration (FDA)-approved gene therapy to treat DMD is ELEVIDYS. Biotech company Sarepta Therapeutics (NASDAQ: SRPT) makes the drug. Since the company began selling ELEVIDYS, it has experienced rapid sales growth. The firm nearly tripled ELEVIDYS sales from Q4 2023 to Q4 2024, with revenue coming in at $384 million last quarter.
Overall, the firm has generated over $1 billion in revenue from the drug. However, unfortunate events have occurred that have the potential to significantly change the DMD space.
One of Sarepta's biggest challengers is Solid Biosciences (NASDAQ: SLDB). Below are the details on what has transpired recently surrounding ELEVIDYS. Solid Biosciences may have an opportunity to better serve the DMD community going forward, potentially leading to large positive implications for its shares.
Tragic Information Comes Out Regarding ELEVIDYS
On Mar. 18, Sarepta issued a heartbreaking announcement on ELEVIDYS. The company said that a young man passed away after doctors treated him with the drug, as he suffered from acute liver failure (ALF). Researchers know that liver injuries can be a major side effect of ELEVIDYS. This risk generally applies to drugs that work the same way.
However, previous testing for the drug did not show ALF leading to death as a complication. In reaction to this extremely saddening event, shares of Sarepta plummeted by over 27%. This event raises doubts about the safety of ELEVIDYS. Doctors may hesitate before prescribing this medication in the future, which could impact Sarepta’s sales trajectory and stock performance.
Now, regulators in the European Union have temporarily stopped three clinical trials of ELEVIDYS. Sarepta is working to get the drug approved in the world’s largest trade bloc, testing it on three different age groups.
However, some believe that the trials will proceed without much delay after the patient's death is fully investigated. Sarepta said an independent committee found that the risk-benefit profile of ELEVIDYS is still favorable. This suggests that regulators may see this as an isolated incident, although investor sentiment could remain cautious in the short term.
Solid’s STG-003 Could Represent a Big Improvement Over ELEVIDYS
Due to the safety concerns with ELEVIDYS, it’s wise to look at the safety profiles of other DMD treatments on the horizon. That is where Solid Biosciences steps in. In mid-February, Solid shared clinical data on its DMD treatment, SGT-003. The results for efficacy and safety were impressive. It's important to note that in the six patients treated, there were no serious side effects.
Researchers did not see any acute liver injury. Representatives also shared interesting comments about SLB101, the capsid that delivers SGT-003 to patient cells. They noted that SLB101 achieved impressive delivery and binding to muscle cells. It was five times more effective than the capsid used in ELEVIDYS while also using a 25% lower dose.
The lower dose aspect of this is particularly important, as dosages that are too high increase the risk of liver injury. Achieving better results with a lower dose may indicate that the drug is safer for the liver compared to ELEVIDYS. Overall, Solid believes that it has a best-in-class DMD medicine in its hands. For investors, this safety profile gives Solid a compelling potential advantage as it works to scale up testing.
Solid Has Potential to Execute on a Multi-Billion-Dollar Opportunity
[content-module:Forecast|NASDAQ:SLDB]Although these safety and efficacy data surrounding SGT-003 are encouraging, the drug still has a long way to go. The patient size is very small so far, and complications could occur as the number of people treated increases. The company is ramping up its testing of SGT-003. It expects to dose 10 patients in total by early Q2 and 20 by the end of the year.
The company also believes it has a strong chance of gaining accelerated regulatory approval. It notes that ELEVIDYS received accelerated approval with data from just six patients. It aims to discuss accelerated approval with the FDA later this year.
Overall, Solid may have a strong opportunity to provide a superior DMD medicine. With around $2 billion in sales expected for ELEVIDYS in 2025, this is a massive market Solid is looking to break into. These expected sales are over eight times the $240 million market cap of Solid as of midday trading on Apr. 4, suggesting significant upside potential if the company can execute. Still, FDA approvals are incredibly difficult to predict. Solid will need to continue providing strong data if the pharmaceutical company hopes to capitalize on this opportunity.
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