Wave Life Sciences' stock soars 51% after biotech posts positive data from Duchenne muscular-dystrophy trial

By Ciara Linnane

Stock is on track for its second-biggest one-day gain

The stock of small-cap biotech Wave Life Sciences Inc. soared 51% Tuesday after the company reported positive interim data from a mid-stage trial of a treatment for the rare muscle disorder Duchenne muscular dystrophy.

That put the stock on track for its second-biggest one-day gain, after it closed up 52.8% on March 17, 2020.

Wave Life Sciences specializes in developing RNA medicines and is working on treatments for Alpha-1 antitrypsin deficiency, DMD, Huntington's disease and obesity.

Duchenne muscular dystrophy is a genetic disease that primarily affects boys and causes muscle degeneration and weakness that often appears in early childhood. There are about 15,000 cases in the U.S., according to the Muscular Dystrophy Association. Many patients do not survive beyond their early 20s.

Wave Life Sciences (WVE) said the trial of its WVE-N531, an exon skipping oligonucleotide being investigated in boys with DMD who are amenable to exon 53 skipping, showed substantial dystrophin expression in an analysis conducted after 24 weeks of 10 mg dosing every two weeks.

DMD is caused by a mutation in the dystrophin gene on the X chromosome that results in little or no production of dystrophin protein, according to the Muscular Dystrophy Association's website.

The gene is made up of 89 sections called exons that provide instructions for creating the dystrophin protein. Exon skipping refers to the use of small pieces of genetic material that bind to the gene and trick it to skip over specific exons.

Wave Life Sciences said the treatment showed 5.5% mean absolute unadjusted dystrophin production and 9% mean muscle-adjusted dystrophin production and was consistent between patients.

The treatment was safe and well tolerated by the 11 boys who were enrolled in the study. The participants ranged in age from 5 to 11, and 10 of them were still able to walk.

"The high and consistent dystrophin levels at this interim timepoint are compelling and speak to the potential of WVE-N531 for boys amenable to exon 53 skipping, where better therapeutic options are urgently needed," said Anne-Marie Li-Kwai-Cheung, who is the company's chief development officer.

The company is now expecting feedback on a pathway to accelerated approval from regulators. It expects the 48-week analysis to be ready in the first quarter of 2025.

Mizuho said the results show WVE-N531 exceeded the generally accepted bar for unadjusted dystrophin production.

"Importantly in our view, WVE also includes patient-level data in today's slides, showing 6 out of 9 evaluable ambulatory patients coming in above the 5% unadjusted dystrophin threshold - so clearly outliers are not solely responsible for the mean (as was the case with some previous competitor data)," analysts led by Salim Syed wrote in a note to clients.

Mizuho noted that the company is advancing a broader DMD pipeline that may skip other exons, which would cover up to 40% of boys with DMD. The analysts have an outperform rating on the stock, the equivalent of buy, with a $19 stock-price target that's more than double its current price.

Of 10 analysts that cover the stock on FactSet, nine rate it a buy and one rates it a hold.

The stock has gained 62% in the year to date, while the S&P 500 SPX has gained 20%.

Read now: Sarepta Therapeutics' stock soars 38% after FDA expands use of its Duchenne muscular-dystrophy drug

-Ciara Linnane

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09-24-24 1341ET

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