The Food and Drug Administration placed a muscular dystrophy study from highly rated Avidity Biosciences on partial hold Tuesday, leading RNA stock to tumble.
One patient experienced a serious side effect. Avidity didn't offer any further details on what the patient experienced. In response, the FDA placed the study on a partial hold, meaning already dosed patients can continue treatment. But Avidity can't add any new patients. It's testing the treatment in patients with myotonic dystrophy 1, a form of muscular dystrophy.
"We think it is promising that the FDA is allowing enrolled patients who already initiated dosing to continue receiving drug or placebo and roll into the open-label extension study," SVB Securities analyst Joseph Schwartz said in a report to clients. In an open-label study, patients know they received the drug.
But on today's stock market, RNA stock plunged 10.9% to 16.70.
RNA Stock Tied To Muscular Dystrophy
Myotonic dystrophy 1 can impact the heart, eyes, endocrine system and central nervous system.
In earlier testing, Avidity didn't find any dose-limiting toxicities, Schwartz said. This means even at the highest dose tested, patients still tolerated the drug. Patients also didn't have any platelet, kidney or liver problems. Avidity also didn't note any changes in cardiac, respiratory and neurological systems.
"We view the partial clinical hold as an incremental setback to (the drug's) clinical development plan as the company investigates the event, but in the meantime we are encouraged that important near-term catalysts remain on track," he said.
Among those, he counts a preliminary readout for the myotonic dystrophy 1 drug in the fourth quarter, and the beginning of studies in two other forms of muscular dystrophy.
Highly Rated Biotech Stock
The news sent RNA stock tumbling in high volume, according to MarketSmith.com.
The biotech stock has one high rating, IBD Digital shows. Shares have a Relative Strength Rating of 92, which puts them in the top 8% of all stocks in terms of 12-month performance.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
