Dawn of a Golden Age for Curing Disease

I don’t know if I am right about this golden age but I can see two exciting things happening. One is all the stuff about GenerativeAI, decoding the human genome and the potential to solve healthcare problems much faster at a more fundamental level. The other is a dramatic springing to life of share prices in the healthcare sector.

Dyne Therapeutics, which is developing therapies for debilitating inherited muscle diseases is a typical example. The shares briefly flew high in 2021 at the peak of the last bull run, plummeted in 2022 as inflation and interest rates soared, and have since exploded higher as attention has focused on their opportunities to make real breakthroughs.

Dyne Therapeutics, Inc. (Nasdaq: DYN), a clinical-stage muscle disease company focused on advancing innovative life-transforming therapeutics for people living with genetically driven diseases, today reported financial results for the second quarter of 2024 and recent business highlights.

“The second quarter of 2024 was an exciting one for our clinical programs and pipeline. We reported new clinical data from our ACHIEVE and DELIVER trials, demonstrating meaningful impact on key biomarkers and functional improvements that reflect best-in-class potential. We are evaluating the clinical profile of different dose and dose regimens with the goal of transforming treatment for individuals living with DM1 [diabetic muscle infarction] and DMD [Duchenne muscular dystrophy]. Based on our compelling clinical data and productive regulatory interactions, we continue to pursue expedited approval pathways and plan to provide an update on the path to registration for both programs by year-end,” said John Cox, Dyne’s president and chief executive officer. “Additionally, we highlighted the modularity of our FORCE™ platform with the presentation of robust preclinical data supporting our FSHD [Facioscapulohumeral muscular dystrophy] program, and for the first time, showed the ability of our platform to deliver enzyme replacement therapy to muscle and CNS [central nervous system] in a Pompe disease model. We also strengthened our balance sheet to support the promise of our portfolio.”

Dyne Therapeutics, Q2 2024, 12 August 2024

You can see from their use of impenetrable abbreviations that they do not expect laymen to be reading their reports. I do not know how likely they are to succeed but they are in with a shot. There are numerous small healthcare technology and biopharma shares with similar charts (collapse in 2022; exploding higher in 23/24) and similarly ambitious programmes for transforming our approach to hitherto intractable diseases and conditions.

The soaring share prices are themselves a game changer by enabling these fledgling businesses to raise significant equity capital without massively diluting existing shareholders.

• In May 2024, Dyne completed an underwritten public offering of 12,075,000 shares of its common stock at a public offering price of $31.00 per share. The gross proceeds from the offering before deducting underwriting discounts and commissions were approximately $374.3m.

Second Quarter 2024 Financial Results

Cash position: Cash, cash equivalents and marketable securities were $778.8m as of June 30, 2024, which is anticipated to fund operations at least into the second half of 2026.

Research and development (R&D) expenses: R&D expenses were $62.3m for the quarter ended June 30, 2024, compared to $59.1m for the quarter ended June 30, 2023.

General and administrative (G&A) expenses: G&A expenses were $9.7m for the quarter ended June 30, 2024, compared to $7.6m for the quarter ended June 30, 2023.

Net loss: Net loss for the quarter ended June 30, 2024, was $65.1m, or $0.70 per basic and diluted share. This compares with a net loss of $64.9m, or $1.08 per basic and diluted share, for the quarter ended June 30, 2023.

Dyne Therapeutics, Q2 2024, 12 August 2024

Absent fund raisings these companies can easily appear to investors to be heading for bankruptcy. The line between disaster and spectacular success is a fine one.

Another example, one of many, is Insmed.

What Insmed is doing.

They are making good progress.

Looking at all these small biopharma makes you realise what a lottery life is. There seem to be 100s of debilitating inherited conditions which strike a tiny minority of humanity and need solutions. Big pharma addresses their efforts to problems affecting large numbers of humans, neglecting conditions which are rare but important to the people who suffer from them. This creates opportunities for smaller companies to target areas of unmet need.

At first sight, it might seem that medical budgets will be unable to fund these treatments which are inevitably expensive in the early years but the flipside is that successful treatments could save a fortune in long-term care.

Below is a list of companies with punchy charts and exciting programmes/ products/ services, some of which have already been alerted in Quentinvest.

Share Recommendations (28 August 2024)

Avidity Biosciences RNA

GeneDX Corp WGS

Soleno Therapeutics SLNO

Transmedics Group. TMDX

Procept Biorobotics Corp. PRCT

Corbus Pharmaceuticals CRBP

Summit Therapeutics SMMT

Aspen Aerogels ASPN

Janux Therapeutics. JANX

Dyne Therapeutics DYN

Viking Therapeutics VKTX

Insmed INSM

Adma Biologics ADMA

Crinetics Pharmaceuticals CRNX

Strategy – Scattergun v Focus

It is hard for a layman to pick winners and losers. This makes it tempting to make small investments across the board. If you do this you should have plenty of exciting newsflow to sustain your interest and if one proves a major success you can not only win big but the whole sector will likely benefit.