Design Therapeutics goes back to the drawing board, causing delay and steep stock drop

Design Therapeutics is living up to its name. After seeing adverse events in its phase 1 rare disease trial, the biotech has redesigned the formulation to counter the problem—but the developments have set the program back years and triggered a 60% stock drop. 

California-based Design previously planned to advance the candidate, DT-216, into a phase 2 clinical trial in the neuromuscular disease Friedreich's ataxia in the second half of 2023. Phase 1 results killed off that plan. Based on the results, the biotech has reformulated the drug and now plans to start a phase 1 trial of the revised version in the second half of next year. 

The new timeline startled investors. With a cash runway that extends into 2026, Design has the money to deliver phase 1 data on its updated formulation—a milestone penciled in for the first half of 2025—but the program is now well behind schedule. Design’s share price fell 60% to $3.00 in premarket trading from a Monday closing price of $7.33.

Management at the biotech concluded the delay is needed after seeing injection site thrombophlebitis, a type of inflammation, in a phase 1 multiple ascending dose study. The clinical trial is stopping dose escalation at 300 mg because of concerns for the worsening of thrombophlebitis at higher doses. Design wants to enable the chronic administration of higher doses of DT-216.

Through nonclinical tests, the biotech has identified excipients in the current DT-216 formulation as the cause of the injection site reactions. The studies have informed the development of a new formulation that had favorable injection site tolerability after multiple intravenous administrations. The company is running bridging nonclinical studies to support the start of clinical development of the new formulation.  

Design framed other aspects of the clinical data as positive, but there were hitches on the efficacy side, too. DT-216 is designed to restore the production of functional FXN proteins to therapeutic levels, but the “variability of results observed with [the] current method substantially limited the utility” of the results the biotech gathered on the levels of the protein.

With DT-216 returning to preclinical development, the genetic vision disorder candidate DT-168 is now heading up the pipeline. Design plans to file to study the candidate in humans this year. A filing to test a third candidate, a treatment for the muscle disease myotonic dystrophy type 1, in the clinic is planned for the second half of next year.