Solid Biosciences Inc. (SLDB) worked on its bid to go public for five months, amending its registration three times and conducting a roadshow to raise millions.
On Thursday, the day before its IPO, the Boston-based company released information that its lead product, SGT-001, had been placed on a partial clinical hold by the FDA amid concerns of the manufacturing quality of higher doses in a clinical trial. The company hopes to gain approval for the drug to treat Duchenne muscular dystrophy.
Not great news to disclose the day before you go public. The trouble is the company had this news since Nov. 17, a month before the registration became a public document. The company declined to comment on why the FDA hold letter wasn't made public earlier, other than to cite the quiet period leading up to the IPO.
Under the circumstances, it wouldn't be unheard of for Solid Biosciences to have pulled its IPO, postponing the offering until the clouds lifted. Instead, the company chose to take its medicine, pricing the IPO down to $16 (from its initial range of $18 to $19) and adding more shares.
Investors didn't seem to mind the company's last-minute disclosure. Shares jumped to $29.25 earlier Friday morning before settling at $22.62 at the close, a jump of 41% for the company's first trading day.
JPMorgan, Nomura, Goldman Sachs & Co., Chardan and Leerink Partners underwrote the offering.
Solid Biosciences is focused on developing a successful treatment for Duchenne muscular dystrophy or DMD. Duchenne is a genetic disorder characterized by progressive muscle degeneration and weakness. Survival for Duchenne patients in the past was not expected beyond the teen years. But progress in cardiac and respiratory care has extended survival into the early 30s.
Duchenne patients show a complete or almost a complete lack of the protein dystrophin, which in turn leads to muscle membrane instability and disruption of the dystrophin glycoprotein complex or DGC. Solid Bioscience has produced Microdystrophin or SGT-001, and by administrating it via adeno-associated virus, it has been shown to stabilize DGC and aid muscle function.
The Jan. 25 admission by Solid Biosciences was not the first indication that there were issues with SGT-001. James Wilson, a well-regarded scientist and member of the Solid Biosciences scientific advisory board, resigned over concerns about risks tied to high dosing of SGT-001, according to the company's prospectus.
The company intends to go forward with the phase 1-2 trial that was started in the fourth quarter, but limit the trial to a lower-dose group of patients for now. In the same prospectus in which it revealed the FDA hold, the company outlined how it plans to handle the issue. It will "decrease the number of vials and utilize no more than a single production lot per patient and demonstrate that we have the appropriate manufacturing process in place to support the higher-dose group."
The company expects to provide that information to the FDA soon, and the regulator's window to respond would be one month.
Much attention has been focused on treatments of DMD over the last two years. In Sept. 2016, the regulator granted an accelerated approval to Exondys 51 as the first disease-modifying drug for DMD. Sarepta Therapeutics (SRPT) won the approval despite the same agency rejecting the results of the company's trial in April 2016. But the drug had a number of patient advocacy groups lobbying for its approval made up of parents and the children affected by the disease. In a controversial decision, the upper management at the FDA reversed the earlier decision. At this time the drug is only approved for treating about 13% of DMD patients.
The FDA also gave the nod last February to Emflaza for treating DMD to treat patients 5 years or older. Marathon Pharmaceuticals acquired Emflaza and raised the price to $89,000 a year after it had been available for other uses overseas for just $1,000. After taking plenty of heat, Marathon sold Emflaza a month after the approval to PTC Therapeutics (PTCT) in a deal that could be worth $190 million.
That deal closed last April and PTC priced Emflaza at $35,000 a year.
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