Dimension Therapeutics Inc (NASDAQ:DMTX) Is A Big Winner For Our Readers

Back in February we made a suggestion: that Dimension Therapeutics Inc (NASDAQ:DMTX) was oversold on a response to the company's reporting of some clinical trial data and that this oversell served up an opportunity to pick up a discounted exposure. Our thesis was relatively simple. Sure, the clinical trial in question had failed (for those that don't remember, it was a hemophilia asset that was under investigation) but Dimension had another couple of promising candidates in its pipeline and any progress from either along their respective development pathways could inject some volume into the stock and the company moving. DMTX DailyAt the time, the company was trading for around $1.20 a share and it pretty much maintained these levels for over for the six months subsequent to our coverage. Until the end of last week, that is.On Friday, Dimension announced that it has reached an agreement that will see Regenxbio Inc (NASDAQ:RGNX), a biotechnology company based out of Rockville, Maryland, acquire Dimension. On the back of the news, Dimension shares rocketed from in and around the above mentioned $1.20 apiece to close out the session on Friday at $3.04. That is a more than 150% appreciation and a nice win for any of our readers that picked up an exposure on the back of our thesis.The question now is, is there any value in holding onto Dimension ahead of the deal closing?It is an all stock deal and, once completed, Dimension shareholders will account for little over 10% of the combined entity. For some, this might be a bit of a disappointment – Dimension held a market capitalization of more than $200 million last year and, at the proposed structure, is now valued at a little over $86 million. There is also the argument, however, that in exposure to a combined pipeline (Dimension's two lead assets and Regenxbio's development portfolio) as well as a revenue-generating entity makes it worthwhile for anybody who holds Dimension shares and is thinking about keeping hold of them moving into the merger.There is also a degree of synergy between the two companies that runs deeper than the potential for revenue generation. The entirety of Dimension's pipeline is based on a gene therapy technology that Regenxbio developed and licensed to Dimension at inception. Basically, it is a technology that allows for use of a virus that's not dangerous to humans as a delivery mechanism for various genes. In patients suffering from a disease that is rooted in a genetic anomaly (mutation, etc.), the use of said virus to deliver an effective form of the deficient gene can be a quick and relatively straightforward treatment method. Dimension is yet to prove that it can work with one of its own gene therapy candidates, but Regenxbio has already proven the model and this suggests that Dimension shouldn't have too much difficulty doing the same (with hemophilia excepted, but that's rooted in disease type as opposed to an error in delivery mechanism).So that's the thesis here. Sure, Dimension shareholders are only going to account for 1/10 of the new company, but Regenxbio is valued at nearly $700 million and generates revenue on its portfolio. These revenues help to negate some degree of dilution risk and the new company will continue to push all of its development assets along their respective pathways towards commercialization.The deal should close before the end of the year and there is a near-term catalyst in the release of data from a phase 1/2 trial of Dimension's lead OTC deficiency asset, DTX301, which is slated to hit press by mid to late fourth-quarter.Check out our previous coverage of this one here. We will be updating our subscribers as soon as we know more. For the latest updates on DMTX, sign up below!Image courtesy of NIAID via FlickrDisclosure: We have no position in DMTX and have not been compensated for this article.