Solid Bio adds 14% as JPMorgan upgrades on AavantiBio buyout

Sep. 30, 2022 11:56 AM ETSolid Biosciences Inc. (SLDB)By: Dulan Lokuwithana, SA News Editor

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Solid Biosciences (NASDAQ:SLDB) gained ~14% on Friday to post the best intraday gain since March after JPMorgan upgraded the clinical-stage biotech to Neutral from Underweight, citing its deal to acquire the privately held gene therapy company AavantiBio.

Analysts led by Anupam Rama cite multiple positives in the merger announcement as reasons for their upgrade.

The team views the combined firm’s decision to prioritize Duchenne candidate SGT-003 over the previous lead candidate SGT-001 as “prudent.”

The analysts also highlighted the pipeline expansion with the addition of preclinical candidates, including AVB-202 for Friedreich’s ataxia and AVB-401 for heart disease, BAG3 mediated dilated cardiomyopathy.

In addition to the cash runway that extends into 2025, JPMorgan also pointed to leadership transition, arguing that CEO designate, former Sarepta executive Bo Cumbo is “well known and regarded on the Street.”

However, the team sticks to a Neutral rating as positives offset the company’s early-stage pipeline and need for value generating clinical data.

Despite a Hold rating and a Sell rating, SLDB has an overall rating of Buy on Wall Street.

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