In late June, when Pfizer Inc. unveiled the first phase Ib data, mixed safety signal and all, for its Duchenne muscular dystrophy (DMD) gene therapy, PF-06939926, investors in Sarepta Therapeutics Inc. as well as Solid Biosciences Inc. watched with particular interest. The latter firm seems none the worse for wear, though, raising $60 million in a private placement.

Cambridge, Mass.-based Solid last week entered a deal with institutional and accredited investors for a $60 million private placement expected to close tomorrow. The company is selling about 10.6 million shares at $4.65 each, a premium to yesterday's closing price of $4.33, plus about 2.2 million prefunded warrants at $4.64 each, exercisable for a share of stock at a price of 1 cent. The money is earmarked for Solid's DMD work and other purposes.

Pfizer, of New York, established findings of safety and tolerability as the test's primary goal, with secondary endpoints given as expression of mini-dystrophin distribution within patients' muscle fibers as shown by immunofluorescence as well as concentration by liquid chromatography mass spectrometry. At the time of the eagerly anticipated Parent Project Muscular Dystrophy meeting in Orlando, Fla., where the data were made public last month, six study participants ranging in age from 6 to 12 had received the one-time intravenous dose of PF-06939926 at either 1E14 vector genomes/kilogram (vg/kg) or 3E14 vg/kg, as quantified using an inverted terminal repeat-based quantitative polymerase chain reaction drug product titer assay.

Preliminary safety results showed that the most common adverse events (AEs) likely related to PF-06939926 were nausea, vomiting, decreased appetite, tiredness and/or fever, reported within a few days of dosing by four of six study participants. Nausea and vomiting symptoms were managed with oral antiemetics for three subjects, but one was hospitalized for a couple of days for intravenous antiemetics and replacement fluids. In all cases, vomiting and fever symptoms resolved within two to five days and the other symptoms resolved within one to three weeks.

So far so good. As Pfizer expected, immune responses turned up in all participants and varied in specificity and magnitude as measured by neutralizing antibody levels and T-cell responses on enzyme-linked immune absorbent spot. But one participant developed a rapid antibody response with activation of the complement system associated with acute kidney injury, hemolysis and reduced platelet count. He was admitted right away to a pediatric intensive care unit and received intermittent hemodialysis, as well as two intravenous doses of a complement inhibitor. Discharged from the hospital after 11 days, he showed renal function that returned to normal within 15 days. Although none of the other subjects on drug developed immune-related clinical events, Pfizer said, in accordance with the study design no other participants would be dosed until the specific additional safety monitoring – endorsed by the external data monitoring committee – has gained all appropriate approvals at the clinical sites.

After the Pfizer data rolled out, Cambridge, Mass.-based Sarepta no doubt breathed easier. "Safety is likely to be a key point of differentiation for [the company's] microdystrophin gene therapy," RBC analyst Brian Abrahams said in a report. "No severe AEs were reported in Sarepta's initial microdystrophin gene therapy study [with SRP-9001 in DMD]," he reminded investors, "and Sarepta noted that all 24 patients [have] enrolled in the pivotal study, presumably without incident. Decreased appetite (described at some points as anorexia by the presenter from Pfizer) was noted in 50% of patients and took one to three weeks to resolve. There were some hints of similar inflammatory-type toxicity that we had noted in the published preclinical work, though the degree to which patient disposition to exaggerated immune response contributed is unclear."

The changed scenario led Abrahams and other Wall Street speculators to begin comparing available data and guessing at odds for ultimate success of various parties in DMD gene therapy. Mechanistic reasons that may have led to more toxicity with the Pfizer (and Solid) programs "are unclear, and we have received many questions as to whether this issue could emerge for Sarepta's program as well," he said. "However, we note that Sarepta uses a different promoter, gene insert, and vector vs. Pfizer and Solid, which share vector and promoter similarities." The devil (or angel) may lie in such details.

"Here is how Pfizer competes with an inferior product profile," crowed Wainwright analyst Debjit Chattopadhyay in the headline of his report covering Sarepta. "It doesn't." In his far-from-singular opinion, "the microdystrophin expression of PF-06939926 would have been groundbreaking little over a year ago, but now appears to be a day late and a dollar short compared to SRP-9001. While we have no reason to doubt Pfizer's commitment to the Duchenne community, we cannot envision a scenario, where PF-06939926 becomes a material obstacle to the potential dominance of SRP-9001, reflected in our near Street high target of $269 on shares of Sarepta." The stock (NASDAQ:SRPT) closed Friday at $149.37, up $1.76.

"As it currently stands, Sarepta has successfully fortified its muscular dystrophy gene therapy franchise with a superior vector, an optimized gene cassette, and a robust muscle-specific promoter, which appear to be combining synergistically to deliver a class-leading product. Hence, business fundamentals could dictate Pfizer gradually de-emphasizing its microdystrophin gene therapy franchise, in our view."

Pfizer kept a stiff upper lip, maintaining plans to forge on. "As [the company] continues to collect data from this ongoing open-label study in boys with DMD, it is also in the planning stages for a global, randomized, placebo-controlled phase III study," the pharma giant said in a press release related to the results pooh-poohed by Chattopadhyay and others. "This study is expected to begin in the first half of 2020, with commercial-scale manufacturing processes using multiple 2,000-liter bioreactors," leveraging lessons from the phase Ib experiment.

'Reactionary selling'

Solid stood its ground, too, and Instinet analyst Christopher Marai said the firm merits consideration even after unfortunate news in May. The company reported an SAE from the second cohort of its phase I/II Ignite DMD study testing gene therapy SGT-001 in DMD. The setback came three months after Cambridge, Mass.-based Solid disclosed disappointing data from the first patient cohort and a year after the FDA lifted a clinical hold placed on the same trial, the first patient treated having suffered an SAE. In its first-quarter report, Solid reported that two patients had so far been randomized in the second, higher-dose cohort, with one of those dosed with 2E14 vg/kg of SGT-001, its investigational microdystrophin gene transfer drug. The second patient was added to the control group. The treated patient was diagnosed with a gastrointestinal infection shortly after dosing, though it was classified as an SAE unrelated to study drug. That subject also experienced a transient decline in platelet count, considered a nonserious adverse event related to SGT-001. More sobering were the transient elevation in transaminases and the transient increase in bilirubin – higher than two times the upper limit of normal, which can be signs of liver damage. Solid said both events rapidly resolved with an increase in oral glucocorticoids and both were reported to the FDA as related to the study drug. The company plans to continue enrolling patients per study protocol, with additional data anticipated later this year. (See BioWorld, May 15, 2019.)

Five days after the Solid news, Marai said in a report that "legitimate concerns about the safety of high-dose AAV9 gene therapy have devolved into reactionary selling on fears over manageable SAEs that have precedent in other high-dose gene therapy trials. In our view, misguided analyses and misplaced interpretations on incomplete information abound, including on the relevancy of the reported acute SAEs," a setup that has created "substantial market inefficiency" for the company. Toxicities, he insisted, "remain manageable and, in the context of a one-time therapy, are likely an acceptable risk for patients. We believe upside potential exists in the higher-dose level (2E14vg/kg) expression data and, more important, future functional data." Solid uses AAV9, the same capsid as Pfizer, "which likely drives most of the gene delivery to muscle tissues – and thus the majority of the potential expression (though promotors and gene design differ). We view Solid's microdystrophin, with the differentiated inclusion of a neuronal nitric oxide synthase binding domain, as potentially best in class from a clinical efficacy standpoint."

The latest Solid financing includes a mix of new and existing investors, including Perceptive Advisors LLC, Boxer Capital LLC, Ecor1 Capital LLC, Bain Capital Life Sciences, RA Capital Management, Waverly Capital, Invus, and certain board members and executive officers.

Shares of Solid (NASDAQ:SLDB) gained $1.49, or 34.4%, to close Friday at $5.82.

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