Following the near 100% rally in shares of Solid Biosciences Inc (NASDAQ: SLDB) in August, one Citigroup analyst said the stock price is diverging from worsening fundamentals.
Joel Beatty downgraded Solid Biosciences from Neutral to Sell and maintained a $6 price target.
Solid Bioscience's gene therapy candidate SGT-001 for treating Duchenne muscular dystrophy is unlikely to be approved in the U.S. in its current form because of dystrophin expression data that is unlikely to be competitive, even with the recent increased dosing, Beatty said in a Wednesday note. (See his track record here.)
Even if the increased dosing brings about the desired result, the analyst said he sees additional challenges pressuring the stock. The company could lag in manufacturing given its low cash levels, which could impact further enrollment in clinical trials and commercialization, he said.
The anemic cash balance also makes the company a less attractive acquisition target, Beatty said.
With Solid Biosciences trailing behind Sarepta Therapeutics Inc (NASDAQ: SRPT) and Pfizer Inc. (NYSE: PFE) in the race to the market, the former could be forced to pitch its therapy to difficult-to-treat, mostly older, heavier patients, the analyst said.
"Using SLDB and PFE's percent dystrophin positive fibers data as a surrogate for transduction efficiency, we model that SLDB could achieve a transduction efficiency in the 40-60% range at their current dosing of 2E14 vg/kg, which, even at the high end of the range, is still considerably inferior to SRPT's ~81%."
The Price Action
Solid Bioscience shares were tumbling 10.34% to $8.15 at the time of publication Thursday.
Biotech Stock On The Radar: MyoKardia Bets On Precision Medicine For Heart Health
Attention Biotech Investors: Mark Your Calendar For These September PDUFA Dates
Latest Ratings for SLDB
|Aug 2019||Upgrades||Market Perform||Outperform|
View More Analyst Ratings for SLDB
View the Latest Analyst Ratings
See more from Benzinga
- The Daily Biotech Pulse: Obseva Gets The Greenlight, Verastem Climbs On Licensing Deal, Merit Medical Earnings Disappoint
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.