Dimension Therapeutics Inc (NASDAQ:DMTX): A Recovery Play?

Dimension Therapeutics Inc (NASDAQ:DMTX) has taken a mid week hit. The company just put out data from its lead hemophilia B study, and while the data has come out as indicative of some degree of clinical benefit, markets have not responded positively to the news. Here's what the data tells us about the drug, and how we expect things to play out for both the asset in question, and the company, moving forward.First, a quick look at the company.Dimension is a development stage biotech focused on the development of drugs that target rare diseases. Specifically, rare diseases that relate to the metabolic process in humans, and those associated with the liver. Rare diseases first got a boost with the introduction of the Orphan Drug Act back in 1983, but over the last decade or so, the space has really heated up. With the influx of capital that hit the space post 2009, many companies have turned their heads toward a rare focus, and Dimension is one such example.So, in this instance, the company is developing a drug targeting the above mentioned hemophilia B. This condition, which also called factor IX (FIX) deficiency, is a hereditary bleeding disorder caused by a lack of (as the name suggests) FIX. FIX is a blood clotting factor, so symptoms of the condition basically revolve around the issues associated with the body not being able to stop itself from bleeding when a patient gets cuts, and internal hemorrhage, that sort of thing. It's not pleasant, and can be extremely serious, and as things stand, there's basically no effective treatment. Well, that's not strictly true – a patient can have a FIX infusion, but that's not a particularly efficient method of dealing with the disease, and it isn’t permanent.Dimension's asset, a drug called DTX101, uses a viral delivery vector (called AAV) to introduce a gene that codes for FIX to a hemophilia B sufferer's system. The idea is that by introducing a functional FIX gene, the body will start producing the blood clotting factor itself (as the gene multiplies by way of cell replication) and – in turn – the level of FIX in the blood will raise to healthy levels.Before we get into the data, here's something worth noting – severe sufferers have FIX levels of less than 1%, moderate sufferers have FIX levels of between 1-5% and mild sufferers have FIX levels of between 6-30%.So, in the latest data drop, the company reported numbers from two dose cohorts – one high, one low. Patients in the high dose cohort achieved peak FIX expression of 13%, 20%, and 12% at weeks 4, 8, and 8, respectively. At follow up, however, this dropped to 5% and 8% in two patients at 12-weeks, and 7% for the third patient at 7 weeks. For the low-dose cohort, expression levels achieved 10-11% peak activity, stabilizing between 3-4% at last follow-up (weeks 24, 48, and 52).These were all moderate to severe patients, so the assumption is that baseline was <1-5%. As such, the high dose (at peak) looks promising, with patients moving into the mild category. The low dose, similar. The extended data doesn’t look as great, however. Sure, patients have improved on aggregate, and look to remain in the moderate/mid classes. The concern is, however, that there are other drugs in development that may be able to improve on this data from an extended efficacy perspective. Biogen Inc (NASDAQ:BIIB) and Pfizer Inc. (NYSE:PFE) are both working on their own development assets in the space (by way of partnerships with some smaller entities) and early data suggests a higher degree of longer term efficacy.For us, however, this isn’t too much of a concern. Dimension has a first mover advantage, and if it can build on this data towards an NDA, we think the FDA will be willing to green-light the drug purely based on the fact that it's safe, somewhat effective and – and here's the important thing – first in class.Cash at last count (September 30) came in at $75 million, so dilution isn’t an immediate concern for anyone looking to pick up an exposure to this seeming oversell.We will be updating our subscribers as soon as we know more. For the latest updates on DMTX, sign up below!Disclosure: We have no position in DMTX and have not been compensated for this article.