Stoke Therapeutics (STOK): A High-Conviction Buy with Disease-Modifying Potential in Dravet Syndrome

In the high-stakes world of pre-commercial biotech, few opportunities balance risk and reward as compellingly as Stoke Therapeutics (NASDAQ: STOK). With its lead candidate, zorevunersen, advancing toward pivotal Phase 3 trials for Dravet syndrome—a rare, catastrophic genetic epilepsy—Stoke has positioned itself at the intersection of unmet medical need, regulatory tailwinds, and a capital-efficient path to commercialization. For investors seeking asymmetric upside in a sector defined by volatility, STOK represents a rare combination of scientific innovation and financial prudence.

The Catalyst: Zorevunersen and the EMPEROR Trial

Zorevunersen is not just another anti-seizure drug. This antisense oligonucleotide (ASO) is designed to upregulate the functional copy of the SCN1A gene, restoring Nav1.1 sodium channel protein levels in neurons. Unlike traditional therapies that merely suppress symptoms, zorevunersen targets the root cause of Dravet syndrome, a condition marked by frequent, treatment-resistant seizures and progressive cognitive decline.

The Phase 3 EMPEROR trial, set to initiate in Q2 2025, is the linchpin of Stoke's thesis. This global, double-blind, sham-controlled study will enroll ~150 patients aged 2–18 years with confirmed SCN1A mutations. The primary endpoint—percent change in major motor seizure frequency—is a well-validated metric, but the inclusion of cognitive and behavioral endpoints (Vineland-3 scales, CGI-C, etc.) elevates the trial's potential. Recent Phase 1/2a data demonstrated an 87% median reduction in convulsive seizures and durable improvements in cognition over 24 months of treatment, even in patients already on best-in-class anti-seizure medications.

Risk-Reward Asymmetry: Cash Runway, Regulatory Tailwinds, and Market Potential

Stoke's financial position is a critical differentiator. As of March 2025, the company reported $380.3 million in cash, sufficient to fund operations through the 2027 readout of the EMPEROR trial and into commercialization. This runway is underpinned by a $165 million upfront payment from its Biogen collaboration, which also shares 30% of clinical development costs and grants tiered royalties on global sales. Biogen's involvement—particularly its exclusive rights outside the U.S.—signals strong industry confidence in zorevunersen's commercial potential.

Regulatory momentum is equally robust. Zorevunersen has secured Breakthrough Therapy, Orphan Drug, and Rare Pediatric Disease designations in the U.S., accelerating its path to approval. If the EMPEROR trial meets its endpoints, the FDA could fast-track approval under the priority review pathway, potentially unlocking six months of market exclusivity via the Rare Pediatric Disease Act.

From a market perspective, the Dravet syndrome treatment space is expanding rapidly. The global market size is projected to grow from $463 million in 2025 to $1.2 billion by 2030 at an 8.7% CAGR. Zorevunersen's first-in-class mechanism positions it to capture a significant share of this market, particularly if it demonstrates not only seizure control but also cognitive benefits—a differentiator absent in existing therapies like Fintepla (fenfluramine) or stiripentol.

Competitive Landscape: A Narrow Window for First-Mover Advantage

While competitors like Encoded Therapeutics (ETX101) and Takeda (soticlestat) are also developing disease-modifying therapies, zorevunersen's Phase 3 readiness creates a meaningful lead. ETX101, an AAV-based gene therapy, is still in Phase 1/2, and soticlestat's Phase 3 SKYLINE trial (2024 readout) has yet to demonstrate a clear advantage over existing options. Moreover, zorevunersen's ASO platform offers a scalable, cost-effective manufacturing model compared to gene therapy's high production costs—a critical factor for long-term commercial success.

Risks and Mitigants

No biotech story is without risk. Clinical trial failure remains the most significant threat, though zorevunersen's 18-month safety profile from earlier trials (600+ doses administered) and Biogen's risk-sharing partnership provide some insulation. Regulatory hurdles also exist, but the alignment of FDA, EMA, and PMDA on trial design reduces uncertainty. Lastly, market competition could intensify if multiple DMTs gain approval, but zorevunersen's cognitive benefits and first-mover status should help it maintain a premium position.

Investment Thesis: A High-Conviction Buy

Stoke Therapeutics offers a high-conviction, asymmetric opportunity for investors willing to tolerate near-term volatility. With a $1.2 billion market opportunity, a $380 million cash runway, and a $165 million Biogen collaboration, the company is well-positioned to advance zorevunersen through Phase 3 and into commercialization. The EMPEROR trial's 2027 readout represents a binary catalyst that could unlock significant value—particularly if the drug demonstrates cognitive improvements, which would differentiate it in a crowded market.

For investors, the key question is not whether biotech is risky, but whether the potential reward justifies the risk. In STOK's case, the answer is a resounding yes.

Disclosure: This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence and consult with a qualified financial advisor.