Sarepta's Clinical Hold Could Be A Solid Biosciences Catalyst, Says Bullish Chardan Analyst

Sarepta Therapeutics Inc SRPT announced a manufacturing-related hold Wednesday on its Phase 1/2 trial of microdystrophin gene therapy for Duchenne muscular dystrophy.

Solid Biosciences Inc SLDB fell in sympathy, but the competitor could benefit from Sarepta’s delay.

The Analyst

Chardan analyst Gbola Amusa maintained a Buy rating on Solid Biosciences with a $60 price target.

The Thesis

Solid Biosciences could seize the lead as Sarepta develops a corrective action plan for the Food and Drug Administration, Amusa said in a Thursday note. (See the analyst's track record here.) 

“Although Sarepta does not anticipate this hold materially delaying its plan to initiate a pivotal trial by year-end 2018, we note manufacturing issues in AAV-based gene therapy, though often addressable, also often take longer than expected to resolve, thus potentially advantaging Solid,” the analyst said. 

Pfizer Inc. PFE could benefit too, but Solid is seen to boast an edge with a trial design more consistent with new FDA guidelines. The biotech company already incorporates features the FDA proposed for a potential gene therapy registrational trial.

“We note, as well, that Solid has scalable manufacturing already in place,” Amusa said. “Manufacturing for GT is notoriously hard ... and dosing DMD patients requires large amounts of vectors relative to other indications.”

With a significantly smaller market cap than either Pfizer or Sarepta, Solid is positioned for the greatest upside, according to Chardan. 

Price Action

Solid shares were trading up 0.32 percent to $38.01 at the time of publication Thursday. 

Related Links:

Analyst: Solid Biosciences A Solid Buy On Sarepta's Progress

Sarepta Hits Record High As Duchenne Muscular Dystrophy Gene Therapy Yields Positive Results In Early-Stage Study