Dyne Therapeutics (DYN) lost nearly 20% so far this year, underperforming the NASDAQ Composite heavily. However, the shares bear the potential to rebound strongly. Thus, I am bullish on this stock.
Based in Waltham, Massachusetts, Dyne Therapeutics is a biotechnology developer of innovative therapeutics to improve the quality of life of patients affected by genetic devastating muscle disorders. These diseases are quite rare as they hit fewer than 115,000 people across the U.S. and Europe. (See DYN stock charts on TipRanks)
Targeted Diseases
Therapeutics will focus on the treatment of myotonic dystrophy type 1 (DM1), Duchenne muscular dystrophy (DMD) and the facioscapulohumeral muscular dystrophy (FSHD).
DM1 affects the muscles and other organs such as the endocrine system, eyes, brain, and heart muscle. The disease is life-threatening in patients who are born with the congenital form of the disorder.
DMD is a progressive degeneration of the muscular system, which becomes weaker and weaker, as a result of alterations of the dystrophin protein in the skeletal muscle. Eventually, the disease leads to death.
FSHD affects the muscles of the face, shoulder blades and upper arms. Life expectancy is normal. However, up to 15% of patients end up in a wheelchair, as they become severely disabled.
From Q2 2021
The company believes that $440 million in cash on hand and marketable securities are sufficient to fund studies for the next 3 years.
Transformation
In the scientific meetings scheduled for September 20-24 and October 1-3, Dyne Therapeutics will present further preclinical data regarding its therapy for the treatment of DM1, DMD and FSHD diseases.
If convincing, these data will be the last step before submitting an Investigational New Drug Application (IND) for each of the three therapeutic approaches, meaning that the Food and Drug Administration will authorize to investigate the treatments on people.
The IND application is expected to be submitted by the end of 2022. Following this, Dyne will become a clinical-stage biotech developer of life-transforming therapies for patients suffering from devastating muscle disorders. Each of the mentioned events could trigger a significant rebound in the share price.
Also important to mention, with the change from preclinical to clinical stage, the company will also be able to consider its therapeutic approaches for less rare neuromuscular diseases. It could analyze their effects in terms of efficacy, safety, and possible undesirable side effects.
Wall Street’s Take on Dyne Therapeutics
In the last 3 months, one Wall Street analyst issued a 12-month price target for Dyne Therapeutics. The average Dyne Therapeutics price target is $45, versus the closing price of $16.93 on August 31. The price target implies a 165.80% upside. The analyst rating consensus is a Moderate Buy rating, based on 1 Buy.
Summary
The stock has performed badly so far this year, missing the market heavily.
This fall, a couple of scheduled scientific meetings could change the profile of Dyne Therapeutics. These could trigger a strong rebound in the share price.