Biotech
Friday, September 30th, 2022 8:00 am EDT
Dive Brief:
- Solid Biosciences will merge with AavantiBio and combine management with the startup in a strategic shakeup for a company that has spent years developing a gene therapy for Duchenne muscular dystrophy.
- Solid’s shareholders will own about 85% of the combined company under the deal announced Friday, with AavantiBio’s shareholders holding the rest. The company will retain Solid’s name but be led by AavantiBio CEO Alexander “Bo” Cumbo, a longtime Sarepta Therapeutics executive. It will develop gene therapies for Duchenne as well as other neuromuscular and heart diseases.
- Solid also will pause development of its lead program in favor of a newer Duchenne gene therapy the company believes may be more effective. It has raised $75 million in a private stock offering alongside the deal to finance the new strategy, which will give the combined company enough cash to survive until 2025.
Dive Insight:
The deal represents a retreat for Solid, which has seen its share price collapse after a series of setbacks in its development of a Duchenne gene therapy. It’s also the end of a journey that Ilan Ganot, a former J.P. Morgan banker, began nearly a decade ago to develop a treatment for his son’s disease.
Ganot formed Solid after his young son Eytani was diagnosed with Duchenne, a progressive muscle-wasting disorder. The company aimed to develop a variety of Duchenne treatments, including a “soft exo suit” that patients could wear to offset their weakened muscles. But gene therapy became Solid’s focus and the company raised almost $150 million privately and another $125 million in an initial public offering to bring it forward.
Still, problems had emerged even before Solid debuted at $18 per share in January 2018 and the company has lost nearly all of its market value since. Its gene therapy was one of three similar programs, along with Duchenne treatments from Sarepta and Pfizer, that progressed through clinical testing. Sarepta’s and Pfizer’s have advanced into late-stage tests that began this year and Sarepta officially filed an application for accelerated approval on Thursday.
Meanwhile, Solid’s program stalled multiple times because of safety concerns. It remains in early testing and the company has restructured twice. Ganot, on a conference call on Friday, conceded the company’s “single disease with a single asset” focus left it vulnerable to the ups and downs of the market.
Recently, Solid began investing in a successor therapy it believes could be more potent. That treatment, dubbed SGT-003, will become the lead program of the newly combined company. Citing recent discussions with the Food and Drug Administration, Solid executives said on Friday that the testing timelines for the two therapies were closer than previously anticipated. The feedback led the company to prioritize SGT-003, which won’t enter human testing until late next year.
“[Sarepta] won, they’ve made great progress over the last couple of years,” Cumbo said on Friday of the company’s decision to change direction. “They’ve laid out a very clear path and we should try to follow it. We’ll move with lightning speed to try to get there.”
Sarepta’s fingerprints are on Solid’s new strategy, too. The biotech helped launch AavantiBio with $107 million in funding in 2020 and Cumbo, Sarepta’s chief commercial officer for eight years, left the company to run it. AavantiBio has been developing treatments for Friedreich’s ataxia and a genetic heart condition known as BAG3-associated dilated cardiomyopathy. The latter condition was the focus of a gene therapy buyout last week by Rocket Pharmaceuticals.
Both programs are in preclinical testing. Solid expects to ask the FDA in 2024 to start a human trial in Friedreich’s ataxia.
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