3 patients add $2.5B to Sarepta's value
- The market capitalization for Sarepta Therapeutics rocketed up billions of dollars after its gene therapy for a rare muscle disease showed early signs of safety, as well as an efficacy profile that some analysts described as beyond a home run.
- Patients who have Duchenne muscular dystrophy (DMD) lack a protein vital for muscle strength and support. Preliminary results from a Phase 1/2 study of DMD patients found the first three boys dosed with Sarepta's therapy had shortened versions of that protein in amounts somewhere between 38.2% and 53.7% the normal level. Researchers also haven't observed any serious adverse events in the trial thus far.
- Previously, company management said protein expression above 15% would be indicative of a trial win. The fresh data — albeit not mature and for very few people — were decidedly better, and fueled a Sarepta stock jump that neared 70% at one point on Tuesday.
The first symptoms of DMD generally start very early in life, with infants (almost always boys) having a difficult time sitting, walking and speaking. Before long the disease progresses. Muscles around the hips and in the extremities get weaker. Many patients are in wheelchairs by the time they're 13, according to the National Institutes of Health, and later on it's common for them to develop life-threatening heart or respiratory problems.
Until recently, no treatment for the underlying causes of the disease had received a thumbs up from the Food and Drug Administration. But Sarepta delivered one in September 2016 with the landmark, and unusually controversial, approval of Exondys 51 (eteplirsen).
The approval, though heralded by patients, received considerable criticism because of the questionable efficacy Exondys 51 demonstrated in the clinic. In one study included in the drug's label, Western blot tests — a method for protein detection — found the average dystrophin protein levels in DMD patients 180 weeks after treatment was less than 1% of normal.
Despite the controversy, Exondys 51 fetched $155 million in net product sales for Sarepta during its first full year on the market, suggestive of the demand for new treatment options. The franchise's growth looks imminent too: investment bank Leerink, for instance, estimates worldwide sales will crest at around $900 million by 2027.
Yet Sarepta is already gearing up for its next act. The biotech has tapped into RNA-targeting and gene therapy technology to create a fleshed-out pipeline of DMD treatments. Most are far from hitting regulators' desks, but data releases like the one issued Tuesday feed the notion that Sarepta's science could translate into potential approvals.
The data "highlight the strong promise" of the micro-dystrophin gene therapy and "should position Sarepta as a leader in this field," Leerink analyst Joseph Schwartz wrote in a June 19 note.
Compared to the dystrophin production spurred by Exondys 51, the results seen from Sarepta's gene therapy would represent significantly more compelling evidence of the treatment's potential benefit — if such figures hold up over a greater number of patients.
Leerink anticipates around $900 million in peak, probability-weighted, worldwide revenues from the therapy.
Others, however, were less bullish.
In a June 19 note on clinical-stage biotech Wave Life Sciences, Mizuho analyst Salim Syed argued that oligonucleotide-based treatments like Exondys 51 or the one Wave is developing could still play a role in the treatment of DMD.
"If one administers the gene therapy too early, it probably won't get into the 'undeveloped' satellite cells that become 'mature' muscle cells later on in life ... as we understand it, sequencing oligo vs gene therapy is something being discussed in DMD patient / medical communities," Syed wrote.
There are also the long-held concerns over the safety of gene therapies, and whether that will weigh on future uptake.
Though it'll take some time to see whether Mizuho's or Leerink's forecasts pan out, Wave investors seem to expect rough weather ahead. The company's stock was down 20% to $40.47 per share at market's close Tuesday.
To be clear, Sarepta's candidate remains far away from commercialization. The Phase 1/2 study will continue, enrolling more boys to gain a fuller sense of the therapy's clinical profile. And more evidence will be needed to show that the improvements in biomarkers also lead to functional benefit for patients. Still, the initial results offer signs of hope for a superior disease-modifying treatment.
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