Dyne Therapeutics stock crashed Tuesday after several key executives departed on the heels of what the company calls "unprecedented" results from its muscular dystrophy treatment.
The biotech company is working on a treatment for a specific group of patients with Duchenne muscular dystrophy. In this disease, the body doesn't make enough of the dystrophin protein, which helps keep muscles intact. After six months of treatment with Dyne's drug, dystrophin levels in patients' muscles were at 3.71% of normal levels.
That's more than tenfold higher than the 0.3% reached by patients who received Sarepta Therapeutics' Exondys 51 in its pivotal study. The Sarepta drug is the standard of care.
Dyne called the results "unprecedented." But, in a second press release, the company said its chief medical officer, chief commercial officer and chief business officer all stepped down. The CMO, Wildon Farwell, will stay on through the end of the year. CCO Susanna High and CBO Jonathan McNeill are pursing new opportunities.
Chief Executive John Cox says investors received a lot of news all at once. He emphasized no one was pushed out or asked to leave the company. This just happened to be the right time for several people to make a change, he told Investor's Business Daily.
"It's very easy to assume there were negative reasons for that," he said. "There were not."
Dyne Therapeutics stock plummeted 30.7% to close at 31.94 on Tuesday. Shares undercut their 50-day moving average, according to MarketSurge. Dyne has a best-possible IBD Digital Relative Strength Rating which puts its 12-month performance in the leading 1% of all stocks.
Sarepta stock dipped a fraction, closing at 135.10.
Skepticism On Dyne Therapeutics' Drug
When adjusting for muscle content, dystrophin levels were an average 8.72% of normal levels. That's greater than new drugs in development today, Dyne Therapeutics said. Cox, the CEO, says most patients with this form of muscular dystrophy deteriorate over time. Treatments can delay that disease progression.
"You normally would not expect significant dystrophin improvement in a patient that has deteriorated," he told Investor's Business Daily. "We saw improvement. I think that data is quite positive. It's not something to be critical of at all."
Further, Dyne said eight boys who received its DYNE-215 treatment showed functional improvements from six to 12 months. That included how fast they could walk or run 10 meters and how long it took them to rise from the floor, among other measures.
RBC Capital Markets analyst Brian Abrahams doesn't expect Dyne Therapeutics' drug to have an impact on Exondys 51 sales.
"We do not see striking dose-dependent functional benefits at about six months compared to placebo, highlighting a possibly unclear benefit of higher dosing with Dyne's construct," he said in a report to clients.
Abrahams kept his outperform rating and 181 price target on Sarepta stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
