Welcome to the next Duchenne muscular dystrophy bubble. Shares in Summit Therapeutics jumped 20% yesterday on release of incredibly early phase II results, but even more indicative of a frothy market was the ability of another DMD player, Solid Biosciences, to pull off a Nasdaq float.
Summit’s data do at least suggest that its lead project, ezutromid, might reduce muscle damage in ambulatory patients. However, Solid’s last-minute disclosure of a study halt – known by the company since before the IPO document was submitted – makes the fact its float will get away at all look like a minor miracle.
The chain of events leading up to Solid’s flotation is barely credible. The company had sought to raise $100m back in November, trumpeting prospects for its lead gene therapy, SGT-001, and saying its advisory board was chaired by none other than Dr James Wilson, an investigator in the infamous 1999 gene therapy study in which a patient death prompted a public backlash.
This month an updated SEC filing disclosed that Dr Wilson had resigned from the advisory board “citing emerging concerns about the possible risks of high systemic dosing of adenovirus vector”. Undeterred, Solid pressed on, upsizing the proposed float and seeking to raise $150m at $18-19 a share.
Yesterday, as Solid was getting set to debut on Nasdaq, came the bombshell: an SEC filing revealed that SGT-001 was actually on partial clinical hold – something Solid had known about since November, but which it did not include in its first IPO document.
However, this appeared not to prompt acrimony and investor panic, and the IPO’s underwriters fought the fire, ultimately limiting the damage to a reduction in Solid’s offering price to $16 a share. Thus, if the float gets away today as expected and the overallotment is exercised in full, the IPO will raise some $144m.
Against such an extraordinary backdrop Summit’s 20% stock climb looks tame. The UK company yesterday released 24-week data from 22 DMD subjects in the Phaseout DMD study given ezutromid, showing a decrease in developmental myosin – a biomarker for muscle damage. The 23% decrease in mean developmental myosin was from baseline, not versus a control arm, so how meaningful a benefit this represents is difficult to tell; eight of the 22 patients did not see a reduction.
Joseph Schwartz, an analyst at Leerink, seemed unimpressed, writing that it was “too early to draw conclusions”. He said utrophin – which Summit hopes can be used to replace dystrophin as a muscle-building protein – has yet to be validated as a biomarker, so longer-term data will be needed to determine whether these 24-week results are clinically relevant.
Progress so far in DMD has been made in patients with a specific mutation – Sarepta’s Exondys 51 is used in patients whose disease is amenable to exon 51 skipping. The promise of Summit’s ezutromid, to which Sarepta owns European rights, is that it could benefit all patients as it is not dependent on altering genetic expression to achieve increases in utrophin production.
Researchers also saw a mean increase in utrophin protein intensity, which could be a sign that ezutromid was having a mechanistic effect. The single-arm study’s co-primary endpoints measure change in MRI leg muscle parameters – one measure, mean fat fraction in the thigh, actually worsened over 24 weeks – and ezutromid plasma concentrations, which Summit said reached levels “sufficient to modulate utrophin”.
Summit executives said 48-week data would be available in the third quarter. They must hope that measures of disease progression improve: on the six-minute walk test the mean distance declined from 404 to 395 metres, and muscle biopsies showed a decline in the mean muscle fibre diameter from 42.1µm to 40.3µm.
The company has said it now plans to carry out a placebo-controlled trial.
Remarkably, the week’s only serious DMD disappointment came courtesy of Santhera, which on Wednesday said its second try to get EU approval for Raxone was as good as dead.
Today the group confirmed receipt of a negative CHMP opinion on the filing, saying additional data were needed to link Raxone’s observed respiratory function effects to patient benefit. The Swiss company’s shares remained flat, having dropped 27% on Wednesday.
DMD-focused investors will note that they still have at least two near-term plays to choose from, as Summit is due to release more data later this year, and Sarepta is talking up a regulatory submission for its follow-up project golodirsen.
The flotation of Solid, meanwhile, might in time be viewed as one of the most egregious examples of misplaced market exuberance, in which case Sarepta investors will feel vindicated for keeping the faith once again.
Where Solid opens today, and where it closes, will be watched with interest – if nothing else than for further indications as to how much frothier the US biotech market can get.
This is an updated version of a story first published yesterday.