Solid Biosciences, Inc.
- Company Name
- Solid Biosciences, Inc.
- Stock Symbol
- Class Period
- Purchasers of Solid Biosciences securities pursuant to the January 25, 2018 initial public offering and/or purchasers between January 25, 2018 to March 14, 2018
- Motion Deadline
- May 26, 2018
- District of Massachusetts
The complaint charges Solid Biosciences, certain of its officers and directors and the underwriters of its January 2018 initial public offering (“IPO”) with violations of the Securities Exchange Act of 1934 and/or Securities Act of 1933. Solid Biosciences is a biotechnology company that purportedly develops therapies and devices for patients with duchenne muscular dystrophy, or DMD, a genetic disorder characterized by progressive muscle degeneration and weakness. The Company’s lead product candidate, SGT-001, is a gene transfer under development to restore functional dystrophin protein expression in patients’ muscles, which uses adeno-associated virus (“AAV”) to deliver the transgene into the patient.
On December 29, 2017, the Company filed a registration statement on Form S-1 with the SEC in connection with the IPO, which was amended and declared effective on January 25, 2018 (“Registration Statement”). The Registration Statement included information regarding the Phase I/II clinical trial, IGNITE DMD, for SGT-001, stating that the Company was enrolling patients in the trial, but omitting any indication of dangerous toxicity levels associated with the administration of SGT-001. On January 25, 2018, Solid Biosciences completed its IPO, selling 8.98 million shares at $16 per share for proceeds of more than $143 million.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s prospects for its lead product candidate, SGT-001. Specifically, defendants failed to disclose that SGT-001 had a high likelihood of causing adverse events in patients and that Solid Biosciences had misled investors regarding the toxicity of SGT-001. As a result of defendants’ false statements and/or omissions, Solid Biosciences shares traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $33.17 per share.
On January 30, 2018, an article was published by various medical experts highlighting the risks of studies administering high doses of gene therapies using AAV, the delivery system used by Solid Biosciences’ lead drug candidate SGT-001. One of the article’s co-authors was Dr. James Wilson, a former member of the Solid Biosciences’ scientific advisory board, who had resigned from the advisory board shortly before the IPO because of “emerging concerns about the possible risk of high systemic dosing of AAV.” On this news, the price of the Company’s shares fell $1.20 per share, or over 5%, to close on January 30, 2018 at $22.50 per share.
Then on March 14, 2018, the Company announced that the U.S. Food and Drug Administration had placed a clinical hold on the IGNITE DMD trial for SGT-001 because of adverse events associated with the therapy, including that the first patient who received the therapy had to be hospitalized several days after administration “due to laboratory findings that included a decrease in platelet count followed by a reduction in red blood cell count and evidence of complement activation.” On this news, the price of Solid Biosciences shares fell $16.99 per share, or over 60%, to close at $9.32 per share on March 15, 2018, a 41% decline from the price at which the shares were sold in the IPO.