Solid Biosciences Inc. (NASDAQ:SLDB) is one of those companies that is on the radar of many small biotechnology investors but that, at the same time, often evades the attention of those who participate primarily in the mainstream side of the pharmaceutical and healthcare markets.

As we head into the end of this week, however, it’s very much earned a place on anyone’s radar and, unfortunately for the company and its shareholders, not for the right reasons.

Solid reported some news related to its lead development program on Wednesday and, on the back of the news, has seen its market capitalization collapse.

Here is what happened.

For anybody not familiar with this company, Solid Biosciences is a Cambridge, Massachusetts based biotechnology company that focuses on the development of treatments for, primarily, Duchenne muscular dystrophy (DMD). The company’s lead program is rooted in a drug called SGT-001, which is referred to scientifically as an adeno-associated virus (AAV) microdystrophin gene transfer candidate.

That sounds a little bit complicated right off the bat, but when you have a clear picture of exactly what DMD is and, more specifically, what causes it, it becomes a little clearer.

DMD is a genetic disorder characterized by progressive muscle degeneration and weakness. It is one of nine types of muscular dystrophy and it is caused by an absence of dystrophin, a protein that helps keep muscle cells intact.

More often than not, this absence is rooted in the dysfunction of the gene that codes for dystrophin, not surprisingly called the dystrophin gene.

This is where the Solid Biosciences treatment comes into the picture.

Through its AAV delivery system, the company is trying to use SGT-001 to insert a functional version of the dystrophin gene into sufferers in an attempt to stimulate the production of functional dystrophin.

This is an approach currently being investigated by a number of companies but, with its lead asset, Solid Biosciences is one of the most advanced and is one on which the speculative capital of many small biotechnology investors rests.

As noted in the above introduction to this piece, however, things haven’t run quite as smoothly as these investors might’ve hoped.

So what just happened?

Well, as per the latest news, the FDA has placed a clinical hold on the company’s program, a Phase 1/2 called IGNITE, following an unexpected adverse reaction to treatment. Specifically, the patient was hospitalized for a reduced blood platelet and red blood cell count and is now without symptoms.

Here is what the company had to say officially on the development:

“Several days after administration the patient was hospitalized due to laboratory findings that included a decrease in platelet count followed by a reduction in red blood cell count and evidence of complement activation.”

So, the fact that the patient is now without symptoms means that this isn’t an overly severe adverse reaction but, that’s not really the point here.

What’s important is that this was an unexpected response to treatment and it was enough to hospitalize the patient involved.

But that’s not all.

This was also the first patient dosed in this study.

So, essentially, what’s happened here is that the company has kicked off a study, dosed a single patient and that patient has ended up in hospital. The patient may now be stable and the drug hasn’t even really been linked to the response (officially) but this is a hospitalization on first dosing and that adds a large degree of uncertainty to the program going forward. Specifically, there is a good chance that the FDA is going to request that Solid Biosciences makes some degree of change as relates to the protocol of the study so as to account for the potential for this sort of adverse reaction right off the bat, as opposed to waiting for the response to happen in patients.

And that’s why the company is down right now. Markets are selling off on the potential for a drawn out delay as the protocol is revised.

Next then, it’s all about what the FDA says near term.

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