Investing.com -- Bernstein has initiated coverage on Avidity Biosciences (NASDAQ: RNA ) and Dyne Therapeutics (NASDAQ: DYN ), assigning “outperform” and “market perform,” respectively.

The analysts identified muscle as a key frontier for oligonucleotide therapies, citing both companies’ antibody-conjugated delivery platforms.

Avidity is favored for its diversified pipeline with three pivotal trials, conservative regulatory path in myotonic dystrophy type 1 (DM1), and a cash runway into 2027.

In DM1, Avidity uses siRNA while Dyne employs antisense oligonucleotides (ASO) to target the DMPK gene.

Although siRNA is traditionally viewed as less active in the nucleus, Avidity has shown evidence of nuclear efficacy through reductions in nuclear CUG RNA foci and restoration of MBNL protein function.

Both companies demonstrated similar vHOT improvements: Avidity’s del-desiran showed -3.1 seconds at 6 months, while Dyne’s DYNE-101 achieved -2.9 seconds.

On QMT, Dyne reported a 10.3% improvement at 12 months versus Avidity’s 4.6%, though Bernstein noted the wide error margins and differing dosing regimens.

Avidity is pursuing full approval with 30-week vHOT data, expecting topline results in 1H26. Dyne is targeting accelerated approval with 6-month vHOT data due mid-2026.

Bernstein estimates 85% probability of trial success for both, applying a 70% regulatory risk adjustment to Dyne, resulting in a 60% probability of approval.

For facioscapulohumeral muscular dystrophy (FSHD), Avidity’s siRNA drug targets DUX4 expression.

The company demonstrated over 50% reductions in DUX4-regulated genes and reductions in a novel circulating biomarker, cDUX.

The main risk is whether placebo patients will decline fast enough to show functional benefit. Bernstein assigns 80% probability of success with a 70% regulatory adjustment.

Avidity guides to FSHD topline data in 2Q26 and DM1 data in 1H26. Dyne expects DM1 data mid-2026.

Bernstein has high conviction in positive outcomes but views Avidity’s DM1 phase 3 readout as the primary stock catalyst, citing ongoing regulatory uncertainty for Dyne.

In DM1, Bernstein models risk-adjusted peak sales of $2.1 billion for Avidity and $2.6 billion for Dyne.

In FSHD, Bernstein estimates $1.8 billion peak sales for Avidity. Valuation multiples are set at 1.2x for Avidity and 0.5x for Dyne, reflecting Avidity’s broader pipeline and financial stability.

For Duchenne muscular dystrophy (DMD), both companies are advancing late-stage assets with expected BLA filings between late 2025 and early 2026.

Bernstein estimates $225 million in risk-adjusted peak sales for Avidity’s del-zota and $190 million for Dyne’s DYNE-251, but these assets contribute minimally to overall valuation.