Sarepta Ekes Out A Narrow Win In Its Gene Therapy Battle; Shares Halted

Food and Drug Administration advisors voted Friday in support of a highly anticipated gene therapy from Sarepta Therapeutics‘ (SRPT). SRPT stock remained halted in the aftermath.

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Sarepta is testing the gene therapy in patients with Duchenne muscular dystrophy, a muscle-wasting disease marked by the absence of the dystrophin protein. Dystrophin is necessary to keep the muscles intact. Sarepta’s drug helps the body make a shortened form of that protein, called microdystrophin. The company is banking on the presence of microdystrophin to win an accelerated approval.

Eight panelists agreed Friday, saying microdystrophin in patients’ muscles does suggest patients will have a functional benefit from the gene therapy. Six disagreed — in essence saying Sarepta’s theory doesn’t pan out. The FDA isn’t bound by the panel’s recommendation, but it does consider the vote.

In earlier commentary, panelists offered split views on the matter. Dr. Raymond Roos, a neurologist, said younger patients seem to benefit, though it would be helpful to know their genetics. But another neurologist, Dr. Steven Pavlakis, says Sarepta didn’t provide statistical evidence that the drug works.

Christopher “Buddy” Cassidy, a panelist with Duchenne, referenced videos from parents of their children enrolled in Sarepta’s study. Some showed patients standing, jumping, running and climbing.

“We, as Duchenne patients — in terms of natural history, in terms of lived experience — don’t get better. We don’t improve,” he said. The activity exhibited by patients in parent-captured videos “is nothing short of miraculous.”

SRPT Stock Dives On Briefing Documents

Briefing documents generated by the FDA this week skewed negatively, analysts said.

Mizuho Securities analyst Uy Ear noted three major concerns in the documents.

First, it’s possible the presence of microdystrophin in patients’ muscles is merely a byproduct of the gene therapy and not evidence that the drug actually works.

Secondly, clinical studies don’t provide unambiguous evidence that the gene therapy will benefit patients who can still walk or patients of all ages. To that point, in one study patients age 6-7 treated with the gene therapy didn’t show any difference from those who received the placebo. Sarepta says that’s because there was an imbalance in those patients’ functional abilities before treatment.

Lastly, Ear noted that the accelerated approval may lead to patients dropping out of the currently ongoing final-phase study called Embark. Companies that gain accelerated approval must confirm a drug’s benefit in a placebo-controlled Phase 3 study. Sarepta hopes Embark will do that for SRP-9001.

Dr. John Brandsema, a clinical trial investigator for Sarepta, noted those concerns during the public comment period of the meeting Friday.

“We know DMD patients can wait several months” for treatment, he said. But “several months will feel like an eternity to parents watching their child decline.”

Mizuho’s Ear has a buy rating and 160 price target on SRPT stock.

FDA Questions Microdystrophin Levels

Other analysts noted that briefing documents tend to appear doubtful of a drug’s capabilities. Advisory committees exist to “stress test the approvability of applications,” SVB Securities analyst Joseph Schwartz said in his note to clients.

“We knew this was certainly going to be the case for Sarepta’s (application),” he said.

Schwartz noted that the FDA has questioned several times the connection between microdystrophin levels in patients’ muscles and functional benefit. But he maintained his outperform rating on SRPT stock.

RBC Capital Markets analyst Brian Abrahams was more forgiving of the briefing documents’ tone. Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research, has backed using the accelerated approval pathway for gene-based products.

“We could see a mixed advisory committee ultimately still culminating in an accelerated approval, and regardless, we continue to see a good likelihood of eventual approval and shares tracking to 200-plus given SRP-9001’s $4 billion sales potential,” Abrahams said in a note.

The analyst expects volatility in SRPT stock but retained his buy rating.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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