When we highlighted Benitec Biopharma Ltd (ADR) (NASDAQ:BNTC) as being one to watch earlier this year, the company was running up on some news related to its ocular therapy pipeline. We noted that there were plenty of opportunities for Benitec to draw additional speculative attention towards its operations throughout early to mid 2017, and that this meant that the run we were seeing at that time was likely just the start of an interesting year for Benitec shareholders.Fast forward a couple of months, and the company is running up again.Last time, the run was rooted in an alternative administration method wet AMD asset, which management was set to take on a conference round throughout February and March. This time around, the drug is a pre clinical asset targeting a condition called oculopharyngeal muscular dystrophy, or OPMD.Benitec just put out some data from an early stage investigation, and the numbers look good.Here's what's important about the drug, the market and what comes next for Benitec.The drug is called BB-301, and it's rooted in a technology called DNA directed RNA interference (ddRNAi). This technology is a patented tech that Benitec developed, and it underpins the majority of the company's investigative candidates. The idea is that the company can target conditions that are caused by faulty genes, and use its technology to both silence the faulty gene, while simultaneously replacing it with a version that works correctly. It's a pretty novel approach, but the beauty of it from Benitec's perspective is that there's a whole spectrum of gene-fault conditions, so if the company can prove it works in one, transference shouldn’t be too difficult.So, OPMD is a muscle wastage type condition that's characterized by dysphagia (difficulty in swallowing), the loss of muscle strength, and weakness in multiple parts of the body. It's generally diagnosed when patient is in their 50s, and can become pretty severe, pretty quickly, post-diagnosis. There's no cure right now, and as such, there's a gap in the market for a company that can get a cure green lighted by the FDA in the US. It's rare, but as we’ve seen with a number of companies over the last half decade or so, rarity doesn't have to limit market potential because of premium pricing. There's also the potential for Orphan Designation (which Benitec is almost certainly going to go after with this asset in the US, and which it's already got in Europe).The data just released, which was published in Nature Communications, an open access scientific journal published by the Nature Publishing Group, demonstrated that dosing (in mice) results in the correction of the muscular dystrophy side of the condition, as well as a host of other key clinical features of OPMD, including a progressive atrophy and muscle weakness associated with nuclear aggregates of insoluble PABPN1 (PABN1) is the mutant protein that causes the gene fault).It looks as though the drug works, then, or at least it does in mice – what's next?Management put forward a timeline for a clinical program investigating 301 alongside the press release announcing the journal publication, and based on this timeline, the company is looking to get the drug into the clinic by way of a phase I/II early 2018.All this is promising, but it's important to recognize the fact that there's considerable risk here. The drug is preclinical, and while there's proof of concept in place, it's a mice model proof, and anyone familiar with this sector will know that many of these sorts of assets fail to transfer clinical benefit from mice to humans. There's also a dilution risk. These sorts of clinical initiations cost money, and this cost is going t come through equity issue. As such, there's a couple of ways of playing this. A short term entry ahead of catalysts (like the one we've just seen, and like the one's we're likely to see as the company applies this tech to alternative indications this year) could be a rewarding one on a quick turnaround position. Alternatively, as a longer term play (one that seeks to take advantage of one of these assets actually hitting markets, instead of just capitalizing on data driven catalysts), an entry post dilution might be a smart move.We will be updating our subscribers as soon as we know more. For the latest updates on BNTC, sign up below!Disclosure: We have no position in BNTC and have not been compensated for this article.
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