Design Therapeutics, Inc. (DSGN) Stock Analysis and Metrics

Sector: Healthcare Industry: Biotechnology CIK: 0001807120

P/B 2.68

P/E -7.92

P/S 0.00

Market Cap 534.47 Mn

ROIC (Qtr) -37.61

Div Yield % 0.00

Rev 1y % (Qtr) 0.00

Total Debt (Qtr) 877,000.00

Debt/Equity (Qtr) 0.00

About

Design Therapeutics, Inc. (DSGN) is a biopharmaceutical company that operates in the rapidly growing field of biotechnology. The company specializes in the research and development of GeneTACTM molecules, a novel class of small-molecule gene targeted chimera therapeutic candidates designed to address the underlying cause of inherited nucleotide repeat expansion diseases. Design Therapeutics' primary business activities involve the design, development, and commercialization of GeneTACTM molecules. These molecules are designed to selectively target...

Design Therapeutics, Inc. (DSGN) is a biopharmaceutical company that operates in the rapidly growing field of biotechnology. The company specializes in the research and development of GeneTACTM molecules, a novel class of small-molecule gene targeted chimera therapeutic candidates designed to address the underlying cause of inherited nucleotide repeat expansion diseases.

Design Therapeutics' primary business activities involve the design, development, and commercialization of GeneTACTM molecules. These molecules are designed to selectively target specific genetic repeat sequences and modulate gene expression to restore cellular health. The company's revenue is generated through the development and commercialization of these GeneTACTM molecules, which are intended to treat a range of inherited nucleotide repeat expansion diseases, including Friedreich's ataxia (FA), fragile X syndrome, myotonic dystrophy type-1 (DM1), Huntington's disease (HD), and Fuchs endothelial corneal dystrophy (FECD).

The company has a diverse customer base, which includes patients with inherited nucleotide repeat expansion diseases, researchers and clinicians in the biotechnology and pharmaceutical industries, and healthcare providers.

The Friedreich's Ataxia (FA) Program is Design Therapeutics' lead program, which is focused on developing a potentially disease-modifying treatment for FA. FA is a devastating monogenic, autosomal recessive progressive disease that affects organ systems highly dependent on mitochondrial function. The company's FA GeneTACTM molecules are specifically designed to restore levels of endogenous FXN, the underlying cause of FA. Restoration of FXN has been shown to improve FA-like symptoms in animal models. Design Therapeutics has completed the MAD Phase 1 clinical trial of its lead FA GeneTACTM small molecule, DT-216, and is planning to initiate clinical trials with DT-216P2, an improved product candidate, in 2025.

The Fuchs Endothelial Corneal Dystrophy (FECD) Program is focused on developing a potentially disease-modifying treatment for FECD, a genetic eye disease characterized by bilateral degeneration of corneal endothelial cells and progressive loss of vision. The company's FECD GeneTACTM small molecule, DT-168, is designed to target the CTG repeats in the TCF4 gene and selectively block transcription of the expansion-containing allele. Design Therapeutics has submitted an IND for DT-168 and has received FDA clearance. The company expects to initiate Phase 1 development for DT-168 in 2024.

The Huntington's Disease (HD) Program is focused on developing a potentially disease-modifying treatment for HD, a serious monogenic neurodegenerative disease characterized by progressive movement, cognitive and psychiatric disorders. The company's HD GeneTACTM molecules are designed to address the root cause of HD by selectively dialing down the expression of the toxic mtHTT gene. Design Therapeutics plans to continue evaluating these HD candidate molecules in preclinical studies and expects to nominate one of them as a development candidate.

The Myotonic Dystrophy Type-1 (DM1) Program is focused on developing a potentially disease-modifying treatment for DM1, a serious monogenic degenerative disease. The company's DM1 GeneTACTM molecules are designed to address the genetic cause of the disease by preventing the expression of mutant gene product and consequently of pathogenic nuclear foci. Design Therapeutics plans to continue evaluating the properties of its DM1 GeneTACTM molecules in both in vivo and in vitro preclinical studies in order to nominate a development candidate.

Design Therapeutics has a strong competitive position in the biotechnology industry, with a unique platform technology that allows it to design and develop GeneTACTM molecules that can selectively target specific genetic repeat sequences and modulate gene expression to restore cellular health. The company's competitive advantages include its proprietary GeneTACTM platform, its experienced research and development team, and its strong intellectual property portfolio.

Stock Price Chart

Analysis

Pros

Strong tangible asset base of 211.77M provides 241.47x coverage of total debt 877000, indicating robust asset backing and low credit risk.
Short-term investments of 190.88M provide solid 20.61x coverage of other current liabilities 9.26M, indicating strong liquidity.
Tangible assets of 211.77M provide robust 22.87x coverage of other current liabilities 9.26M, indicating strong asset backing.
Cash reserves of 15.09M provide robust 1.35x coverage of current liabilities 11.17M, indicating strong short-term solvency.
Strong cash position of 15.09M provides 1.63x coverage of other current liabilities 9.26M, indicating excellent liquidity.

Cons

Operating cash flow of (52.25M) barely covers its investment activities of 36.33M, with a coverage ratio of -1.44, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Investment activities of 36.33M provide weak support for R&D spending of 57.86M, which is 0.63x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Short-term investments of 190.88M significantly exceed cash reserves of 15.09M, which is 12.65x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
The company's operating cash flow of (52.25M) shows concerning coverage of stock compensation expenses of 14.59M, with a -3.58 ratio indicating potential earnings quality issues.
Free cash flow of (52.41M) provides weak coverage of capital expenditures of 159000, with a -329.63 ratio suggesting additional external financing needs for growth initiatives.

Peer Comparison

Companies in the Biotechnology

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SMMT	Summit Therapeutics Inc.	1,349.40 Bn	-1,464.17	0.00	0.01 Bn
2	ONC	BeOne Medicines Ltd.	437.43 Bn	6,381.20	87.97	1.90 Bn
3	VRTX	Vertex Pharmaceuticals Inc / Ma	116.09 Bn	31.59	9.90	1.83 Bn
4	REGN	Regeneron Pharmaceuticals, Inc.	78.10 Bn	17.06	5.48	2.71 Bn
5	ALNY	Alnylam Pharmaceuticals, Inc.	55.87 Bn	1,282.42	17.40	3.21 Bn
6	ARGX	Argenx Se	52.85 Bn	35.08	27,559.65	-
7	BNTC	Benitec Biopharma Inc.	41.75 Bn	-998.33	0.00	0.00 Bn
8	INSM	INSMED Inc	37.80 Bn	-31.93	84.56	0.74 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.44	12.31
EV to Cash from Ops.	-9.87	23.25
EV to Debt	588.22	738.44
EV to EBIT	-7.65	-9.16
EV to EBITDA	-6.67	6.95
EV to Free Cash Flow [EV/FCF]	-9.84	21.90
EV to Market Cap	0.97	65.67
EV to Revenue	0.00	227.32
Price to Book Value [P/B]	2.68	22.34
Price to Earnings [P/E]	-7.92	-11.77

Dividend Metrics

Metric	Value	Industry	Percentile
Dividend Coverage Ratio	0.00	-11.94
Dividend Payout Ratio %	0.00	0.16
Dividend per Basic Share	0.00	0.01
FCF Dividend Payout Ratio %	0.00	-0.14
Interest Coverage	0.00	841.00

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	56.68	-27.13
Cash and Equivalents Growth (1y) %	-50.25	734.65
Dividend Growth (1y) %	0.00	0.01
EBIAT Growth (1y) %	-41.16	-46.93
EBITDA Growth (1y) %	-28.54	-1.68
EBIT Growth (1y) %	-41.16	-56.45
EBT Growth (1y) %	-41.16	-12.70
EPS Growth (1y) %	-40.00	-28.31
FCF Growth (1y) %	-12.93	-31.90
Gross Profit Growth (1y) %	0.00	226.84

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.00	0.14
Cash Payout Ratio	0.00	0.00
Cash Ratio	1.35	3.85
Current Ratio	18.71	7.27
Debt to Equity Ratio	0.00	0.40
Interest Cover Ratio	0.00	841.00
Times Interest Earned	0.00	841.00

Profitability

Metric	Value	Industry	Percentile
EBITDA Margin %	0.00	-18,234.31
EBIT Margin %	0.00	-18,580.80
EBT Margin %	0.00	-19,488.74
Gross Margin %	0.00	-7.59
Net Profit Margin %	0.00	-19,439.22

Design Therapeutics, Inc. (NASDAQ: DSGN)