Quick Take

Dyne Therapeutics (DYN) has filed to raise $100 million in an IPO of its common stock, according to an S-1 registration statement.

The company is advancing a pipeline of drug treatment candidates for various muscle diseases.

DYN is still at a very early stage of development and likely won’t begin Phase 1 trials until 2022, so the IPO may be more suited to institutional investors with a long-term hold time frame.

I’ll provide a final opinion when we learn more details.

Company & Technology

Waltham, Massachusetts-based Dyne was founded to develop treatments for muscle diseases such as Myotonic dystrophy, Duchenne muscular dystrophy and Faciocapulohumeral muscular dystrophy.

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Management is headed by president and Chief Executive Officer Mr. Joshua Brumm, who has been with the firm since October 2019 and was previously COO and CFO at Kaleido Biosciences and the same at Versartis, both biopharma firms.

Below is a brief overview video of myotonic dystrophy:

Source: Osmosis

The firm’s lead candidate, DMPK, is still in preclinical stage of development for the treatment of Myotonic dystrophy and management expects to submit IND (Investigational New Drug) applications for all of its existing candidates between Q4 2021 and Q4 2022.

Below is the current status of the company’s drug development pipeline:

Source: Company S-1 Filing

Investors in the firm have invested at least $29.4 million and include Atlas Venture, Forbion Capital, MPM Bioventures, RA Capital, Vida Ventures, Citadel Multi-Strategy and Wellington Biomedical.

Market & Competition

According to a 2018 market research report by Grand View Research, the market for Duchenne muscular dystrophy treatments is forecast to reach $4.1 billion by 2023.

This represents a forecast CAGR (Compound Annual Growth Rate) of 41.3% from 2019 to 2023.

Key elements driving this expected growth are the emergence of mutation-specific treatments, increasing numbers of patients and government initiatives.

Also, mutation-specific treatments will likely have less growth due to their expensive pricing structure.

Major competitive vendors that provide or are developing treatments include:

  • Pfizer (PFE)

  • Eli Lilly (LLY)

  • Mylan Pharmaceuticals (MYL)

  • Wockhardt

  • Teva Pharmaceutical Industries (TEVA)

  • Novartis (NVS)

  • BioMarin Pharmaceutical (BMRN)

  • Asklepios Kliniken

  • Hoveround

  • Siemens Healthcare (OTCPK:OTCPK:SIEGY)

Financial Status

Dyne’s recent financial results are typical for a biopharma firm in that they feature no revenue and significant R&D and G&A expenses associated with developing its pipeline of drug treatments.

Below are the company’s financial results for the past two and ½ years (Audited PCAOB for full years):

Source: Company registration statement

As of June 30, 2020, the company had $11.7 million in cash and $14.3 million in total liabilities. (Unaudited, interim)

IPO Details

Dyne intends to raise $100 million in gross proceeds from an IPO of its common stock, although the final amount may be different.

No existing shareholders have indicated an interest to purchase shares at the IPO price, although this element may become a feature of the IPO if disclosed in a future filing.

Management says it will use the net proceeds from the IPO as follows:

for continued research and development of our programs, including preclinical studies, IND-enabling studies and clinical trials;for continued development and enhancement of our proprietary FORCE platform; andthe remainder for working capital and other general corporate purposes.

Management’s presentation of the company roadshow is not available.

Listed bookrunners of the IPO are J.P. Morgan, Jefferies, Piper Sandler and Stifel.

Commentary

Dyne is seeking public capital market funding to advance its pipeline into Phase 1 trials and continue development of its proprietary FORCE platform.

The firm’s lead candidate for the treatment of Myotonic dystrophy is still in preclinical stage and won’t see the beginning of Phase 1 safety trials until well into 2022 at the earliest.

The market opportunities for various dystrophies is expected to grow in the near term, due to advances in treatment options and the high prices for these rare disease treatments.

Management has disclosed no research or commercial collaborations, so is currently pursuing a ‘go-it-alone’ approach.

The company’s investor syndicate includes a number of well-known and highly regarded biopharma investment firms, which lends credence to the firm’s efforts and potential.

J.P. Morgan is the lead left underwriter and IPOs led by the firm over the last 12-month period have generated an average return of 72.2% since their IPO. This is a top-tier performance for all major underwriters during the period.

Dyne is working in a notoriously difficult area of drug development and is still at a very early stage of development.

The IPO may be more suited to long-term hold time frame institutional investors.

I’ll provide a final opinion when we learn more IPO details.

Expected IPO Pricing Date: To be announced.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.