On March 27, 2018, investors sued Solid Biosciences, Inc., (“Solid Biosciences” or the “Company”) in United States District Court, District of Massachusetts. Plaintiffs in the federal securities class action allege that their acquisition of Solid Biosciences stock at artificially inflated prices was based on inaccurate information in the Company’s registration statement and prospectus (collectively the “Registration Statement”) issued in connection with the initial public offering (“IPO” or “Offering”) made on January 25, 2018; and/or that they acquired the Company’s stock at artificially inflated pries between January 25, 2018 and March 14, 2018 (the “Class Period”). Here’s what you need to know about the Solid Biosciences class action lawsuit:

They are now seeking compensation for losses incurred upon public revelation of the Company’s alleged misconduct during that time.

Summary of the Allegations

Company Background

According to its website, the Company (NASDAQ: SLDB) is “a life science company built solely to solve Duchenne muscular dystrophy.”

Duchenne muscular dystrophy  or DMD, is an incurable “rare, genetic disease” affecting one in every 3,500-5,000 boys. It is usually diagnosed when children fail to meet developmental milestones and is characterized by rapid progression. Most patients are unable to walk by the time they are 10 to 14 and ultimately succumb to respiratory or heart failure as adults.

The Company’s lead product candidate, SGT-001, is a “gene transfer under development to restore functional dystrophin protein expression in patients’ muscles.”

Summary of Facts

Solid Biosciences and two of  its senior officers and/or directors are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.

Specifically, they are accused of omitting truthful information about the safety and efficacy of its lead product candidate from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Solid Biosciences stock to trade at artificially inflated prices during the time in question.

The truth initially surfaced on January 30, 2018, when “various medical experts” including a former member of Solid Biosciences’ advisory board, published an article “highlighting the risks of studies using high doses of gene therapies using adeno-associated virus (AAV).”

Then, after the market closed on March 14, 2018, the Company issued a press release announcing that the U.S. Food and Drug Administration (“FDA”) put a clinical hold on the SGT-001 Phase I/II clinical trial, IGNITE DMD.

A closer look…

As alleged in the March 27 complaint, the Company failed to make legally mandated disclosures in the IPO prospectus included in the Registration Statement filed with the SEC on January 2, 2018.

The Company also made false and misleading statements in an amendment to its S-1 form, which is also part of the Registration Statement for the IPO. In the amendment to the form, which was filed with the SEC on January 25, 2018, the Company referred to the toxicity of its lead product candidate, saying in pertinent part: “We observed no evidence of test-article related toxicity for up to 13 weeks after systemic administration of SGT-001 in either species that would prevent us from initiating clinical studies.”

What the Company failed to disclose, however, was that SGT-001 “had a high likelihood of causing adverse events in patients,” and that it “misled investors regarding the toxicity of SGT-001.”

Impact of the Alleged Fraud on Solid Bioscience’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is May 29, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Solid Biosciences common stock using court approved loss calculation methods.

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About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.