Report casts cloud over Sarepta’s new Duchenne muscular dystrophy therapy and its path to regulatory approval
Sarepta Therapeutics Inc. stock slid 6.4% Thursday, after a news report cast uncertainty over the path to regulatory approval for the company’s SRP-9001 gene therapy for a rare genetic disorder.
SRP-9001 is a treatment for Duchenne muscular dystrophy, or DMD, an inherited disorder of progressive muscular weakness that typically affects boys. Symptoms that appear in early childhood include frequent falls, difficulties getting up or running and learning disabilities, and patients have a life expectancy of about 27. About 20,000 children are diagnosed with DMD globally every year, according to the Muscular Dystrophy Association.
In March, when Sarepta SRPT, -9.41% reported its fourth-quarter earnings, it cheered investors with the news that it expected the Food and Drug Administration would not require an advisory meeting relating to SRP-9001, suggesting the treatment was on track for an accelerated approval.
FDA Advisory Committees make recommendations to the FDA on whether to approve a drug, although the agency is not bound to the committee’s decision.
By mid-March, the FDA had contradicted the biotech company and said it would require a meeting, sending the stock down sharply.
On Thursday, specialty healthcare news service STAT said that behind the scenes, the FDA had actually been leaning toward rejecting the therapy, before a top official intervened and directed staff to schedule an advisory committee meeting.
That official, Peter Marks, is an advocate for faster gene therapy approvals, said STAT, which cited three people familiar with the FDA’s deliberations.
The advisory committee meeting has been scheduled for May 12. Sarepta already markets three treatments for DMD.
Mizuho analysts said the report raises the risk that the new treatment will not win accelerated approval as many were expecting.
“However, we believe the article also provides support for Sarepta’s argument that the head of the FDA’s biologic center (CBER) would like to see the BLA (Biologics License Application) approved under the accelerated pathway,’ they wrote in a note to clients.
Sarepta told Mizuho that it believes the views expressed in the report came from Dr. Wilson Bryan, a senior CBER official who is no longer at the FDA.
“Wilson Bryan was misaligned with Peter Marks and Celia Witten’s vision that CBER follow the science and adapt the regulatory approach to keep up with recent scientific advances,” the company told Mizuho, according to its note.
Marks has talked about the use of accelerated approval for gene therapies at several conferences recently, the company added. “It is our understanding that Peter Marks and Celia Witten have been very involved in the review since Wilson Bryan’s departure.”
Mizuho rates the stock a buy and has a $160 price target that’s more than 25% above its current price.
Evercore ISI analysts said the news “probably sets up for the adcomm briefing documents and tone to be somewhat more negative versus what was expected, which is likely what the market is pricing in.”
Evercore rates the stock at the equivalent of buy with a $149 price target.
Sarepta shares have gained 53% in the last 12 months, while the S&P 500 SPX, +1.33% has fallen 7%.