With risk coming back on for biotech, we decided to revisit a couple of smaller names from our past that have provocative technology and near(er) term catalysts that could capture investors’ attention. Both companies are developing small molecules for diseases where most R&D dollars are being deployed into gene therapy. Both companies have early yet compelling data that, with a little more evidence, could lead to a rerating higher. Let’s revisit Gain Therapeutics (Nasdaq: GANX) and Satellos Biosciences (US: MSCLF, TSX: MSCL).
Gain Therapeutics is set to announce data from its Phase 1b study of the oral small molecule GT-02287 in Parkinson’s disease (PD) patients next month. Our first note on Gain dates back to May 2023, when the company was about to move into the clinic with GT-02287. In what was an abysmal biotech tape, in that initial note, we wondered whether the company might consider partnering GT-02287 instead of testing the equity markets. At that time, there was business development activity in the genetic subgroup of PD patients, GBA1-PD, with Eli Lilly (NYSE: LLY) and Neurocrine (Nasdaq: NBIX) acquiring or licensing GBA1-targeted gene therapies (both programs are still active but advancing slowly). Whether by choice or necessity, Gain chose the capital markets route, financing GT-02287’s development through several small equity financings. Fortunately, the company didn’t blow up its capital structure, and it currently has a palatable 38 million shares outstanding, with a modest $65 million market cap. Its balance sheet, which we estimate to be around $10 million today, will need to be addressed, but Gain has an attractive valuation heading into a key proof-of-concept readout in PD patients next month.
Brief Refresher
GT-02287 targets the lysosomal enzyme glucocerebrosidase (GCase), whose misfolding, caused by a mutation in the GBA1 gene, is linked to several central nervous system (CNS) disorders. Once misfolded, GCase cannot enter the lysosome to perform its normal function, leading to the buildup of toxic substrates in the cell and contributing to the death of dopaminergic neurons. GT-02287 is a small molecule that binds to GCase, stabilizing the enzyme and chaperoning it into the lysosome. This enables GCase to perform its cleaning role and helps protect dopaminergic neurons. Mutations in GBA1 and misfolded GCase are implicated in Parkinson’s disease, Gaucher disease (GD), and Alzheimer’s disease (AD).
Initial Target, Early Evidence
Gain’s initial target indication for GT-02287 is PD. Up to 15% of all PD patients have a GBA1 mutation, making it the leading genetic risk factor for developing PD. GBA1-PD patients generally experience an earlier onset and a more aggressive form of the disease compared to other PD patients. Although GBA1-PD patients have the most pronounced GCase deficiency, it is also observed in idiopathic Parkinson’s disease (iPD) patients. Gain has completed preclinical models demonstrating the potential disease-modifying benefits of GT-02287 in GBA1-PD and iPD.
In 2024, Gain conducted a healthy volunteer study with GT-02287. In that study, cerebrospinal fluid (CSF) levels confirmed CNS exposure to GT-02287, and drug levels were within the expected therapeutic range. The company also measured GCase levels in the highest dose cohort (13.5 mg/kg). Although these were healthy volunteers with normal GCase levels, GT-02287 showed an encouraging 53% increase in GCase from baseline, compared to a 4% increase in the placebo at day 14. The company’s Chief Medical Officer stated, “The fact that we saw an increase in GCase activity in healthy volunteers, who we assume have homeostatic mechanisms to counter-regulate a pharmacologically-induced increase in GCase enzymatic activity, indicates that it will have more pronounced effects on GCase in people with Parkinson’s disease (PD) and further confirms our conviction that GT-02287 may be able to slow or stop the progression of PD.”
Impending Data
In March, the company initiated an open-label, single-arm, multicenter study in 20 patients who have either GBA1-PD or iPD (21 were ultimately enrolled). Study participants will receive a 13.5 mg/kg dose of GT-02287 for 90 days. Like most early-stage PD studies, Gain will be measuring a plethora of biomarkers, both from blood and CSF, as well as functional scores from the Movement Disorder Society Unified Parkinson’s Disease Rating Scale (MDS-UPDRS).
The company will present initial functional data from approximately half of the patients in the Phase 1b study on October 7th at the International Congress of Parkinson’s Disease and Movement Disorders. The biomarker data from this initial group of patients will be analyzed shortly after and are expected to be available later in November. The final data from all study participants are expected to be available by the end of the year or early next year.
Strengthening The Narrative
Gain with GT-02287’s elegant mechanism of action and disease-modifying potential for PD, as well as other GBA1/GCase-mediated diseases, presents a compelling narrative but lacks clinical evidence. In a few weeks, investors will get their first look at whether GT-02287 can deliver that evidence when the company shares functional data from the Phase 1b study. While small open-label proof-of-concept studies have limitations, if GT-02287 demonstrates an improvement in MDS-UPDRS, the first piece of clinical evidence to support that compelling narrative will be in place. If the company follows this up with biomarker data, especially a significant increase in GCase and ideally additional biomarkers trending favorably for GT-02287, then Gain should have a narrative, supported by clinical evidence, that will resonate well with investors.
Ambitious Plans
We last discussed Satellos Biosciences in December 2024, when we highlighted their ambitious clinical plans for SAT-3247, an oral small molecule that targets muscle stem cells for the treatment of Duchenne muscular dystrophy (DMD). At the time of our December update, Satellos was finishing its Phase 1 healthy volunteer study and enrolling a small Phase 1b cohort of non-ambulatory DMD patients. The company was also preparing to launch multiple Phase 2 studies, including open-label trials across different age groups and a randomized controlled trial (RCT) in pediatric patients.
Much has changed since that December note. The company reported promising safety data from its Phase 1 healthy volunteer study. More interesting were the results from the Phase 1b non-ambulatory adult DMD cohort, which, albeit from a very small sample size, showed some functional improvement in grip strength after four weeks of SAT-3247 treatment. We shouldn’t overinterpret this early functional signal (and to Satellos’ credit, they haven’t been hand-waving about it either), but it shouldn’t be overlooked that three out of five non-ambulatory DMD men experienced a significant improvement in grip strength.
Since our December note, the company’s Phase 2 plans have undergone slight adjustments. Satellos no longer intends to conduct multiple open-label studies; instead, they reopened the Phase 1b study, allowing the five non-ambulatory men to continue treatment with SAT-3247 (up to a total of 12 months of SAT-3247 treatment) and to enroll new non-ambulatory patients. Importantly, however, the company has not changed its plan to conduct a placebo-controlled RCT in children with DMD. This week, Satellos announced it has submitted its IND to FDA, and once cleared, it aims to enroll the first pediatric patient before year-end. Considering the playbook created by DMD pioneer Sarepta Therapeutics (Nasdaq: SRPT), using open-label biomarker data for accelerated approval, we emphasize the ambitious nature of Satellos’ decision to conduct an RCT for its first study in children with DMD.
Speaking of Sarepta
Recent safety setbacks with Sarepta’s Elevidys, including multiple patient deaths from liver failure in 2025 and subsequent FDA clinical holds, highlight the risks of AAV-based gene therapies. This could create an advantage for safer, oral small molecules, such as SAT-3247, which avoid invasive delivery and immune response issues. It is worth noting that, while Sarepta and others focus on muscle fiber and dystrophin production, SAT-3247 targets muscle stem cells, restoring their ability to generate new muscle. Satellos believes that SAT-3247, as an oral small molecule with a dystrophin-independent mechanism of action, could be widely used in DMD patients across all age groups, regardless of ambulation status or background medications.
https://ir.satellos.com/events-and-presentations/default.aspx
Data-Rich 26
Assuming an imminent IND clearance for SAT-3247, investors can anticipate a steady cadence of clinical data from Satellos next year. The recently reopened open-label Phase 1b study is anticipated to generate data throughout the year. The open-label data will serve as an appetizer, but investors likely won’t have to wait long for the main course, with blinded interim data from the pediatric RCT expected in 1H2026, and top-line data available as early as mid-2026.
Although the company has not yet shared all the details of the RCT, we know it will involve 51 ambulatory pediatric DMD patients, evenly randomized across three arms: a high-dose and low-dose arm of SAT-3247 and a placebo arm. Patients will be treated for a period of three months. The company will assess serum biomarkers, muscle biopsies, and functional data; however, it has not yet specified the study’s key efficacy endpoints. Although Satellos is calling this a Phase 2 study, investors should view it as having pivotal potential. Given the precedent set by Sarepta, the regulatory bar for accelerated approval is relatively low. In fact, it could be argued that positive functional data from this RCT might be sufficient for standard approval in DMD. Investors can let their imaginations run wild on what Satellos could be worth in that scenario.
Follow The Money
For an OTC/TSX-listed company, Satellos hasn’t had any issues raising funds from U.S.-based deep-science investors. Despite Satellos’s success in raising money, the absence of a proper U.S. listing has clearly limited the trading of its stock. The company has committed to listing on Nasdaq. Once listed on Nasdaq, Satellos, with a valuation of around $100 million and “pivotal” DMD data expected mid-next year, is likely to attract significant investor attention.