The three-horse race to treat a devastating form of muscular dystrophy is now down to two. One of the key players, Avidity Biosciences, is feeling particularly bullish about its chances.
Last month, Fulcrum Therapeutics dropped out of the race to treat facioscapulohumeral muscular dystrophy, or FSHD. In this condition, a mutation causes a gene called DUX4 to switch on. The protein it makes is "poison" to the muscles, says Avidity Chief Executive Sarah Boyce. Muscles in the face, shoulders, arms and legs begin to waste away, usually before age 20.
Fulcrum said its drug failed to make a difference vs. a placebo in patients with FSHD. The company is suspending development of that drug. That means Avidity is now locked in a race with Roche to treat the muscle-wasting disease.
Avidity Biosciences is also testing treatments for myotonic dystrophy type 1 and a subset of patients with Duchenne muscular dystrophy. Two of its drugs are, potentially, "multibillion-dollar drugs," Boyce told Investor's Business Daily. There are about 40,000 people in the U.S. with myotonic dystrophy type 1 and 30,000 with FSHD.
"It's one of those elements that is just so incredibly exciting in that we have three drugs, one after the other this year, that has the potential to make a profound impact in people's lives," she said.
Avidity Biosciences Nears Record High
Avidity Biosciences stock has been on a roll. After trading near 9 at the start of the year, the biotech stock has skyrocketed about 441%. Shares hit an intraday record high at 49.41 on Oct. 2.
The La Jolla, Calif.-based company got its start in 2012 by focusing on RNA, which carries the instructions from DNA to the cells, which produce proteins. Sometimes, those proteins can cause problems. Two of Avidity's drugs silence RNA. A third aims to skip over the messenger entirely.
"We don't alter the genome, it's not gene editing," Boyce said. "Your DNA remains completely the same. I describe it to some people as we basically interrupt the mail service. That stops the letter from getting to the wrong place."
RNA-targeting drugs could be powerful for numerous diseases. Alnylam Pharmaceuticals and Ionis Pharmaceuticals cracked the code on how to deliver these drugs to the liver, Boyce said. But silencing RNA in other tissue types has proved to be a trickier proposition for the industry.
Notably, Arrowhead Pharmaceuticals has a pipeline of RNA-interfering drugs in testing for conditions in the heart, lungs and muscles. The company also has drugs in early-stage testing to treat myotonic dystrophy type 1 and FSHD.
"These diseases have been waiting for someone to figure out how to deliver RNA to muscle cells," Boyce said.
Avidity Bio Vs. Roche
Avidity Biosciences' drug — abbreviated as del-brax — blocks the abnormal expression of DUX4. Roche's drug binds to myostatin, a protein that limits muscle growth.
On June 12, Avidity said patients with FSHD had an average 50% reduction in DUX4 after four months of treatment with del-brax. Patients also showed increased muscle strength and functional improvements. Avidity stock rocketed almost 33% that day.
The company is also working on a treatment for myotonic dystrophy type 1, or DM1. Patients with this disease can't relax their muscles at will.
Avidity's drug, known as del-desiran, works by skipping over the RNA responsible for making DMPK. The DMPK protein plays a key role in muscle, heart and brain cells. The company is currently running del-desiran in a Phase 3 study.
There are no approved treatments for FSHD or DM1. The Food and Drug Administration gave Avidity a breakthrough designation for del-desiran in May.
Sarepta Drops On Avidity Biosciences News
Avidity Biosciences stock also got a boost on Aug. 9 after it reported positive results for its drug, del-zota, in patients with a form of Duchenne muscular dystrophy. In this condition, patients' bodies don't make enough for the dystrophin protein necessary to keep muscles intact.
Sarepta Therapeutics has a hold on most of the Duchenne market. Three of its drugs skip exons — or specific places in the genome — to help the body make dystrophin. Its gene therapy, Elevidys, helps patients make shortened versions of that protein.
Avidity's del-zota works by skipping another section of the genetic code related to dystrophin production. Boyce estimates the drug could treat roughly 7% of patients with Duchenne muscular dystrophy. There are about 900 boys and young men with the disease in the U.S. and another 900 in Europe.
If Avidity Biosciences' efforts in skipping exon 44 work, the company plans to move onto exon 45. Sarepta sells a drug for this subset of patients called Amondys 45.
"We're now very much turning on the gas on looking at other exons," Boyce said.
Analysts Split On Avidity's Future
But analysts are split on whether Avidity Biosciences can take on Sarepta Therapeutics.
Needham analyst Joseph Stringer raised his price target on Avidity stock to 60 from 45 after the company unveiled the results from a midstage study of del-zota.
After four months, patients who received del-zota had a 25% boost in dystrophin production and reached dystrophin levels that were at 54% of normal levels. Muscle biopsies also showed an 80% decrease in creatine kinase levels. This enzyme shows muscle damage.
Avidity Biosciences stock surged 12.1% that day, while Sarepta shares slumped 8.3%.
But RBC Capital Markets analyst Brian Abrahams doesn't expect Avidity to pressure Sarepta. Numerous patients will still elect to undergo gene therapy treatment. Similarly, Mizuho Securities analyst Uy Ear called the move on Sarepta stock "overdone."
"First, exon 44 skipping represents less than 5% of the DMD opportunity, and as such this genotype represents a small fraction of the overall Elevidys opportunity," Ear said in a report. "Second, while the treatment paradigm for DMD is evolving with the introduction of gene therapy, we believe there is the potential for patients to receive exon-skipping products post Elevidys treatment."
Avidity Shares Are Consolidating
Despite the contention on Wall Street, there's still potential for Avidity stock to move higher. The biotech company has partnered with Bristol Myers Squibb to work on 10 potential precision cardiology drugs. It also has a collaboration with Eli Lilly in immune cells.
Boyce, Avidity's CEO, calls the cardiology collaboration "game-changing." Doctors used to treat patients with cancer with the chemotherapy hammer. Today, they look for the underlying genetic causes of the disease. Tomorrow, they could do the same with heart diseases, she said.
"Today, cardiologists will not routinely sequence a patient to see if there's an underlying driver," she said. "This is again where we're looking to lead the space. It's a brand new therapeutic approach."
Avidity stock broke out of a consolidation with a buy point at 48.80 — the July 29 high — on Oct. 2, MarketSurge shows. Shares are now flirting with the lower boundary of the buy zone, which runs up to 51.24.
The biotech stock also has a best-possible Relative Strength Rating of 99, according to IBD Digital. This means shares of Avidity Biosciences rank in the leading 1% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
